Canada (Attorney General) v. MacQueen, 2013 NSCA 143

Nova Scotia Court of Appeal Citation: Canada (Attorney General) v. MacQueen , 2013 NSCA 143 Date: 20131204 Docket: CA 392560 Registry: Halifax Between: The Attorney General of Canada, representing Her Majesty the Queen in right of Canada Appellant v. Neila Catherine MacQueen, Joseph M.

Petitpas, Ann Marie Ross, Kathleen Iris Crawford, Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia Respondents Docket: CA 393200 Registry : Halifax Between: Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia Appellants v. Neila Catherine MacQueen, Joseph M.

Petitpas, Ann Marie Ross, and Kathleen Iris Crawford, and The Attorney General of Canada representing Her Majesty the Queen in right of Canada Respondents Judges: The Court (Oland, Farrar and Bryson, JJ.A.) Appeal Heard: March 19, 20 and 21, 2013, in Halifax, Nova Scotia

Subject: Class Actions – Certification – Class Proceedings Act, S.N.S. 2007, c. 28, s. 7(1) and 15

Summary: The lawsuit by certain property owners and residents of Sydney against Canada, Nova Scotia and Sysco pursuant to their operation of the Sydney steel works was certified as a class proceeding. The appellants appeal the Certification Order, arguing that the requirements of s. 7(1) of the Class Proceedings Act that must be met before a proceeding can be so certified were not satisfied. They also say the judge erred in regard to the scope of his jurisdiction under s. 15 of the Act .

Issues: Whether the certification judge erred in finding that: (1) the pleadings disclosed causes of action under trespass, battery, negligent battery, liability under the rule in Rylands v. Fletcher , and nuisance; (2) the claims of the proposed class members raise common issues; (3) a class proceeding would be the preferable procedure for the fair and efficient resolution of the dispute. Whether he erred in determining the scope of his jurisdiction. Result: The appeals are allowed. The Order certifying the lawsuit as a class action is overturned.

The facts as set out in the pleadings do not support the cause of action of strict liability as based on the rule in Rylands v. Fletcher . They also do not support the causes of action of trespass, battery, and negligent battery. The remaining causes of action, namely, nuisance, negligence, and breach of fiduciary duty, are not sufficiently common to all the prospective class members to justify certification as class actions. A class action lawsuit is not the preferable procedure in this case because it would not provide the expected benefits.

For example, it would not save judicial resources nor give claimants easier and less expensive access to justice. Finally, whether, in re-drawing the class boundaries on his own motion, the certification judge exceeded his jurisdiction pursuant to s. 15, is moot and need not be addressed by the court. This information sheet does not form part of the court’s judgment. Quotes must be from the judgment, not this cover sheet. The full court judgment consists of 54 pages. Nova Scotia Court of Appeal Citation: Canada (Attorney General) v.

MacQueen , 2013 NSCA 143 Date: 20131204 Docket: CA 392560 Registry: Halifax Between: The Attorney General of Canada, representing Her Majesty the Queen in right of Canada Appellant v. Neila Catherine MacQueen, Joseph M. Petitpas, Ann Marie Ross, Kathleen Iris Crawford, Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia

Respondents Docket: CA 393200 Registry : Halifax Between: Sydney Steel Corporation, a body corporate, and The Attorney General of Nova Scotia, representing Her Majesty the Queen in right of the Province of Nova Scotia Appellants v. Neila Catherine MacQueen, Joseph M. Petitpas, Ann Marie Ross, and Kathleen Iris Crawford, and The Attorney General of Canada representing Her Majesty the Queen in right of Canada Respondents Judges: Oland, Farrar and Bryson, JJ.A.

Appeal Heard: March 19, 20 and 21, 2013, in Halifax, Nova Scotia Held: Appeals allowed and the Certification Order is set aside, per reasons for judgment of the Court. Counsel: Paul Evraire, Q.C., Angela Green and Melissa Chan, for the Attorney General of Canada Agnes MacNeil and Alison Campbell, for the Attorney General of Nova Scotia and Sydney Steel Corporation Raymond F. Wagner Q.C., C. Scott Ritchie, Q.C., Michael Robb and Michael Dull for Neila Catherine MacQueen, Joseph M.

Petitpas, Ann Marie Ross and Kathleen Iris Crawford By the Court: [ 1 ] For close to a century, steel was produced in the heart of Sydney, Cape Breton. The steel works which opened in 1903 consisted of two different facilities: (

a) a steel plant, and (

b) coke ovens where coke was produced for use in the plant. The coke ovens closed in 1998 and the steel plant in 2000. With that closure ended the history of steel-making in industrial Cape Breton. [ 2 ] These appeals arise from a lawsuit by the respondent individuals, who are landowners and residents of Sydney. They allege that the emission of hazardous contaminants from the steel works caused damage to and constitutes an interference with their property rights and the integrity of their persons.

They brought an action against various entities who had been involved with the steel works, including Canada and the Province of Nova Scotia. [ 3 ] In the course of their litigation, the respondents asked that their claim be certified as a class proceeding. In his decision dated January 19, 2012, Justice John D. Murphy of the Nova Scotia Supreme Court ordered that certification. He also established the class boundaries. His decision is reported as 2011 NSSC 484 . [ 4 ] Canada and Nova Scotia appeal the certification judge’s order dated May 1, 2012. For the reasons which follow, we

would allow the appeals. Background: [ 5 ] For the first several decades after the steel works opened in 1903, they were privately owned.

In 1967, when the owner planned to close it, the Province of Nova Scotia enacted the Sydney Steel Corporation Act , 1967 (2nd Sess.), c. 1 which authorized its purchase and created the Sydney Steel Corporation (“Sysco”) to operate the steel works. [ 6 ] Sysco operated the coke ovens until their closure in 1998, except for a temporary closure between 1983 and 1985, and except for the six years between 1968 until 1974 when a federal Crown corporation (Devco) owned and operated them. Devco, which was created pursuant to the Cape Breton Development Corporation Act , R.S.C., 1967, c.

C-6, was dissolved pursuant to the Cape Breton Development Corporation Divestiture Authorization and Dissolution Act, S.C. 2000, c. 23 . Its legal successor is the Attorney General of Canada representing Her Majesty the Queen in right of Canada which we call “Canada” throughout this decision. [ 7 ] Sysco operated the steel plant for all thirty-three years from 1967 until its closure in 2000. [ 8 ] When the respondents started their lawsuit in 2004, they named as defendants several private entities and operators, as well as the public owners and operators of the steel works.

In the intervening years, the proceedings against the private interests settled, leaving Canada, Nova Scotia and Sysco as the remaining defendants. The present allegations are limited to the period between 1967 and 2000, when Devco owned and operated the coke ovens for six years and Sysco operated either or both of the steel plant and coke ovens. [ 9 ] In their 2004 statement of claim, the respondents alleged that airborne emissions from the operation of the steel works caused personal injury and created a nuisance, and residues from those emissions constituted an ongoing nuisance and health risk.

They cited multiple causes of action, including battery, strict liability and nuisance, trespass, negligent operation of the steel works, regulatory negligence and breach of fiduciary duty. [ 10 ] In the years since the initial filing, the statement of claim has been amended several times. The Nova Scotia Supreme Court struck out certain allegations against Canada and Nova Scotia for negligence, and breach of fiduciary duty only in relation to their regulation of the steel works: MacQueen v. Ispat Sidbec Inc. , 2006 NSSC 208 .

The respondents changed other aspects. [ 11 ] The respondents first sought certification as a common law class action proceeding in September 2007. By order granted September 30, 2008, their action was continued pursuant to the Class Proceedings Act , S.N.S. 2007, c. 28 (the “ CPA” ), which came into force in June 2008. [ 12 ] The current statement of claim is the Fourth Amended Consolidated Statement of Claim (“Statement of Claim”). By Consent Order dated January 8, 2013, the Statement of Claim was accepted in substitution for its predecessor.

Among other things it sought an order certifying the proceeding as a class proceeding and appointing the respondents as representative plaintiffs for class members described as the owners of real property and the residents who have lived, for a minimum of seven years, within class boundaries which were provisionally described in an appendix to the Statement of Claim. [ 13 ] The Statement of Claim alleges that the operations of the steel plant and coke ovens spewed hundreds of thousands of tonnes of contaminants, including heavy metals, polycyclic aromatic hydrocarbons and dangerous respirable particulates into the air, water and soil of Sydney; such contaminants and others accumulated in the former tidal flats adjacent to Sydney Harbour at the mouth of Muggah Creek, known as the Sydney Tar Ponds; the remediation plan proposed by Canada and Nova Scotia fails to address the impacts of the contamination on its residents and their property; and the exposure to the contaminants continues.

According to the Statement of Claim, Canada, Nova Scotia and Sysco knew or were substantially certain from various studies conducted over the years that the respondents and class members would inhale, ingest and have dermal contact with the contaminants directly resulting from their operations of the steel plant and coke ovens.

It says that they suppressed that information or deliberately presented misinformation in order to deny or conceal the harm to the environment, property and the risk to the health of the respondents and class members. [ 14 ] In the Statement of Claim, the respondents specify that they do not seek recovery of damages for the individual personal injuries and health problems they and other class members have allegedly suffered.

The remedies they seek include cessation of exposure by either remediation by removal of contaminants from the properties or relocation of residents; the implementation of a medical monitoring program consisting of a large-scale epidemiological study and an education program; damages for nuisance for the exposure and substantial interference to the enjoyment of their properties; and damages for the intentional tort of battery or alternatively, for negligent battery.

In addition to battery and nuisance, the Statement of Claim alleges that Canada, Nova Scotia and Sysco are liable to the respondents and class members for trespass, negligence and breach of fiduciary duty based on their ownership and operation of the steel works. [ 15 ] The hearing of the motion to have the proceeding certified as a class action was lengthy. It began with seven days in December 2009, then two days in each of January and April 2010, followed by eight days scattered through June, September, October and December 2010, for a total of nineteen days to receive evidence and submissions.

The sixteen affiants included the individual respondents. Other affiants included experts in the fields of toxicology, epidemiology, environmental engineering, hydrogeology and environmental health risk assessment. Most of the affiants were cross-examined. Almost four dozen exhibits, including various reports and assessments by experts, were presented. The parties filed briefs and supplemental briefs, and made oral submissions. [ 16 ] On June 24, 2010 and July 6, 2011 the certification judge rendered oral decisions.

He issued his written decision on January 19, 2012. [ 17 ] The CPA specifies when the court is required to certify a proceeding as a class proceeding. According to its s. 7(1) , several requirements must be satisfied. [ 18 ] The Court must be of the opinion that the pleadings disclose a cause of action and that the claims of the class members raise a

common issue. When the certification judge heard the respondents’ motion, Canada and Nova Scotia acknowledged the adequacy of the cause of action for breach of fiduciary duty. They claimed that the pleadings did not support causes of action in trespass, battery and negligent battery.

However, they did not agree as to the sufficiency of the pleadings in negligence, nuisance and strict liability – Nova Scotia conceded those, Canada did not. [ 19 ] The certification judge was satisfied (¶29 of his decision) that the pleadings contained allegations of fact in support of each cause of action for which the respondents sought to have the claim certified as a class proceeding.

He further determined (¶52) that the claim raised common issues and that the proposed common issues were consistent with the causes of action pleaded. [ 20 ] The CPA also stipulates that certification as a class proceeding is only available if it would be the preferable procedure for the fair and efficient resolution of the dispute.

The judge concluded (¶60) that the respondents had satisfied their burden to establish that the statutory considerations favoured a class proceeding. [ 21 ] The certification judge went on to deal with whether there was an identifiable class of claimants and the geographical boundaries for the classes. He was satisfied (¶78) with the respondents’ proposals to establish two classes of claimants - property owner and residential - and the same geographic boundaries for both classes (¶79).

After reviewing submissions on his authority to fix the boundaries other than as proposed by the respondents, the judge concluded (¶97) that he could make adjustments within reasonable limits, provided those revisions were supported by the evidence. He then defined the property boundaries. [ 22 ] The CPA also requires the court to be satisfied that there is a representative party who has provided a plan for the class proceeding that, among other things, establishes a workable method of advancing the proceeding on behalf of the class.

The certification judge reviewed the respondents’ most recent proposed litigation plan. He had no hesitation (¶127) approving its format and its general content in principle. [ 23 ] In

summary, the certification judge granted (¶129) the respondents’ amended motion for certification with the revisions reflected in his reasons. [ 24 ] By Notices of Application for Leave to Appeal and Notices of Appeal (Interlocutory), Canada, Sysco and Nova Scotia appeal from the decision and order certifying the proceeding as a class proceeding. Farrar, J.A. granted the motion for leave to appeal in Sydney Steel Corporation v. MacQueen , 2013 NSCA 5 . Issues: [ 25 ] The appellants argue that the certification judge erred in finding that: (1) the pleadings disclosed a cause of action pursuant to s. 7(1)(

a) of the CPA ; (2) the claims of proposed class members raise common issues, pursuant to s. 7(1)(

c) of the CPA ; and (3) a class proceeding would be the preferable procedure for the fair and efficient resolution of the dispute, pursuant to s. 7(1)(

d) of the CPA . [ 26 ] In addition to these grounds, Nova Scotia submits that the certification judge erred in determining the scope of his jurisdiction under s. 15 of the CPA . It submits that his

interpretation of s. 15, which allowed the judge to re-draw the class boundaries on his own motion, is an error of law. However, it is not contesting those boundaries as defined by the certification judge. In these circumstances, the issue is moot. We are not persuaded that there is any reason why it should nevertheless be considered, and decline to do so.

This is, of course, not to be construed as accepting or endorsing any of the judge’s reasoning with regard to s. 15 of the CPA . [ 27 ] In the result, our analysis will deal with whether the pleadings disclose a cause of action, whether the claims raise common issues, and whether a class proceeding is the preferable procedure. In considering each of these issues, we will determine the applicable standard of review. We begin with an overview of class proceedings.

Overview of Class Proceedings: [ 28 ] In 1982 the Ontario Law Reform Commission recommended that class proceedings legislation be passed specifically to deter wrongful corporate and government behaviour, (Ontario Law Reform Commission, Report on Class Actions , vol.1 (Toronto: Ministry of the Attorney General, 1982)). The report concluded that class actions facilitate a voice for mass grievances in an orderly fashion, within the framework of the judicial system. In 1992 Ontario enacted the Class Proceedings Act , 1992, S.O. 1992, c. 6 implementing the recommendations of the 1982 Commission report.

Since then all common law provinces, other than Prince Edward Island, have passed similar legislation. [ 29 ] A useful history and overview of class action proceedings and their predecessors is provided by the Supreme Court of Canada in Western Canadian Shopping Centres Inc. v. Dutton, 2001 SCC 46 at ¶19 to 29, where class actions are described as having: 26 … an important role in today’s world. The rise of mass production, the diversification of corporate ownership, the advent of the mega-corporation, and the recognition of environmental wrongs have all contributed to its growth.

A faulty product may be sold to numerous consumers. Corporate mismanagement may bring loss to a large number of shareholders. Discriminatory policies may affect entire categories of employees. Environmental pollution may have consequences for citizens all over the country. Conflicts like these pit a large group of complainants against the alleged wrongdoer. Sometimes, the complainants are identically situated vis-à-vis the defendants. In other cases, an important aspect of their claim is common to all complainants.

The class action offers a means of efficiently resolving such disputes in a manner that is fair to all parties.

27 Class actions offer three important advantages over a multiplicity of individual suits. First, by aggregating similar individual actions, class actions serve judicial economy by avoiding unnecessary duplication in fact-finding and legal analysis .

The efficiencies thus generated free judicial resources that can be directed at resolving other conflicts, and can also reduce the costs of litigation both for plaintiffs (who can share litigation costs) and for defendants (who need litigate the disputed issue only once, rather than numerous times): ... 28 Second, by allowing fixed litigation costs to be divided over a large number of plaintiffs, class actions improve access to justice by making economical the prosecution of claims that would otherwise be too costly to prosecute individually .

Without class actions, the doors of justice remain closed to some plaintiffs, however strong their legal claims. Sharing costs ensures that injuries are not left unremedied: ... 29 Third, class actions serve efficiency and justice by ensuring that actual and potential wrongdoers do not ignore their obligations to the public . Without class actions, those who cause widespread but individually minimal harm might not take into account the full costs of their conduct, because for any one plaintiff the expense of bringing suit would far exceed the likely recovery.

Cost- sharing decreases the expense of pursuing legal recourse and accordingly deters potential defendants who might otherwise assume that minor wrongs would not result in litigation: ... [Emphasis added, citations omitted] [ 30 ] The foregoing advantages of class proceedings were reiterated by the Supreme Court in Hollick v.

Toronto (City), 2001 SCC 68 at ¶15: The Act reflects an increasing recognition of the important advantages that the class action offers as a procedural tool . … In my view, it is essential therefore that courts not take an overly restrictive approach to the legislation, but rather interpret the Act in a way that gives full effect to the benefits foreseen by the drafters. [16] It is particularly important to keep this principle in mind at the certification stage. … The question at the certification stage is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action : … [Emphasis added] [ 31 ] As previously noted, the CPA came into force in June 2008.

It is similar to class proceeding legislation in Ontario and elsewhere.

Section 7 addresses certification: 7(1) The court shall certify a proceeding as a class proceeding on an application under

Section 4, 5 or 6 if, in the opinion of the court, (

a) the pleadings disclose or the notice of application discloses a cause of action; (

b) there is an identifiable class of two or more persons that would be represented by a representative party; (

c) the claims of the class members raise a common issue, whether or not the common issue predominates over issues affecting only individual members; (

d) a class proceeding would be the preferable procedure for the fair and efficient resolution of the dispute; and (

e) there is a representative party who (

i) would fairly and adequately represent the interests of the class, (ii) has produced a plan for the class proceeding that sets out a workable method of advancing the class proceeding on behalf of the class and of notifying class members of the class proceeding, and (iii) does not have, with respect to the common issues, an interest that is in conflict with the interests of other class members.

(2) In determining whether a class proceeding would be the preferable procedure for the fair and efficient resolution of the dispute, the court shall consider (

a) whether questions of fact or law common to the class members predominate over any questions affecting only individual members; (

b) whether a significant number of the class members have a valid interest in individually controlling the prosecution of separate proceedings; (

c) whether the class proceeding would involve claims or defences that are or have been the subject of any other proceedings; (

d) whether other means of resolving the claims are less practical or less efficient; (

e) whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means; and (

f) any other matter the court considers relevant.

(3) Notwithstanding subsection (1), where an application is made to certify a proceeding as a class proceeding in order that a settlement will bind the members of a settlement class, the court shall not certify the proceeding as a class proceeding unless the court approves the settlement. [ 32 ] There can be no question that class actions have had a significant impact on the legal landscape.

They permit potentially massive reallocations of resources by courts, invite confusion between public (punitive) and private (compensatory) remedial regimes, affect matters as diverse as the adequacy of insurance coverage, the nature, extent and timing of settlements, counsels’ compensation, ethical challenges created by the potential conflict between counsel and claimants, and inter-jurisdictional disputes about which courts should hear which case or cases.

For a useful discussion of some of these issues: Shaun Finn, “Summoning Leviathan: A Critical Analysis of Class Action Theory and the Ethics of Group Litigation” (2007) 4:1 Can. Class Action Rev. 119. [ 33 ] While none of the foregoing informs how the courts should apply the law, they emphasise the effects of failing to do so accurately. Causes of Action: [ 34 ] Section 7(1) of the CPA requires the court to certify a class proceeding if satisfied that all five enumerated conditions are met.

The first of those conditions is that the pleadings (or notice of application) disclose a cause of action. [ 35 ] A cause of action has been defined as: … every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved. ( Read v.

Brown (1888), 22 Q.B.D. 128 per Lord Esher, M.R. at 131) and … simply a factual situation the existence of which entitles one person to obtain from the court a remedy against another person. ( Letang v. Cooper , [1965] 1 Q.B. 232 , per Diplock, L.J. at 242). [ 36 ] The appellants attack the certification judge’s determination that the respondents have properly pleaded their causes of action. [ 37 ] In his decision, the certification judge correctly described the test for ascertaining whether a cause of action is made out: [16] The requirement under section 7(1)(

a) of the Act that pleadings disclose a cause of action is assessed strictly on the pleadings , assuming all facts pleaded to be true and reading the claim generously realizing that drafting deficiencies can be addressed by amending the pleadings (Ward Branch, Class Actions in Canada , Aurora, ON, Canada Law Book, 2009 para 4.80). [Emphasis added] [ 38 ] He then went on to discuss the causes of action: [24] The written and oral submissions by the defendants (especially Nova Scotia) and the plaintiffs' response at the June 2010 motion hearing included intensive examination of the allegations in the statement of claim in the context of authorities which prescribe requirements for and components of the causes of action pleaded.

These reasons will neither dissect the way every cause of action has been framed, nor analyze the scientific evidence and opinions advanced in affidavits filed by expert witnesses who underwent

extensive cross examination. In my view, to do so would be to exceed the assessment contemplated by section 7(1)(

a) of the Act. I will,however, refer generally to some of the allegations and testimony, including from the four representative plaintiffs, which disclose thecauses of action for which I have found a class proceeding will be certified. Some of the background relevant to my determining whichcauses of action should be certified will also be found later in these reasons when I address the common issues proposed for inclusion inthe certification order. [25] The plaintiffs maintain that during the approximately 33 years when one or both defendants operated a facility[sic] the SteelWorks: (

a) They spread contaminants which are known to be harmful to the environment and human health into the air, water and soil; (

b) The plaintiffs did not consent to discharge of the contaminants; (

c) Release of the contaminants from the defendants’ properties resulted in damage to the health and lands of persons to be includedwithin class boundaries; (

d) The presence and the consequences of the contaminants remain, and their escape from the Steel Works facility continues; (

e) The defendants have not taken steps to clean up the contaminants; (

f) Scientific studies available to the defendants disclosed the presence and effect of the contaminants, and the defendantsmisrepresented the conclusions of the studies and the effects of the contaminants to the plaintiffs. [26] The defendants raised particular concerns about some causes of action – for example, they argued the claims for trespass,battery and negligent battery could not succeed because the facts pleaded cannot establish requisite elements such as directness orphysical interference.

Nevertheless, I have determined that the statement of claim and evidence at the certification hearing disclosesufficient information to support certifying the causes of action which are challenged by the defendants. The distinctions amongnuisance, trespass and negligent or intentional battery and the mental element required for each can be subtle (see G.H.L. Fridman, TheLaw of Torts in Canada 2d ed., (Toronto: Carswell, 2002), at pp. 37-8 and Philips v. California Standard Co., (ABKB), [1960] 31 W.W.R. 331 (Alta.S.C.) at para. 7).

In this case, there is no indication to date of any independent or intervening agencyinterrupting "direct" deposit of contaminants, and it is debatable whether material emitted may be deemed non-physical because itconsisted of small particles. … [29] I am satisfied that the current pleading, which is detailed, contains allegations of fact in support of each cause of action forwhich the plaintiffs now seek to have the claim certified as a class proceeding ‒ breach of fiduciary duty, nuisance, strict liability,trespass, battery and negligent battery for both a Property Owner Class and Residential Class of plaintiffs, and negligence simpliciter fora property class only.

All causes of action advanced include arguable claims. Testimony at the motion hearing provided someevidentiary basis for each cause of action ‒ it is not plain or obvious that any will not succeed. Each raises an issue to be tried andshould be certified. My conclusion does not preclude either re-evaluation of causes of action being advanced or pleading amendment ifadditional information is developed as the claim progresses; however, progress of the case should not be delayed by more inquiry at thisstage. [Emphasis added] [39] The certification judge did not discuss in detail each alleged cause of action.

Moreover, he appears to have taken into accountevidence when assessing the viability of the causes of action – something the law proscribes, which he had earlier acknowledged. It maybe that here the certification judge was really summarizing his overall approach to certification, without confining himself to causes ofaction. Evidence is admissible when assessing other criteria in s. 7, including commonality of issues, (e.g. Hollick, at ¶25). [40] The appellants argue that these passages reveal two errors of law.

The first is the judge’s consideration of evidence whendeciding whether the causes of action were made out. The second is that the judge failed to analyse the pleadings to determine if thecauses of action were made out. [41] The appellants are correct that the validity of pleaded causes of action cannot be augmented or diminished by reference toevidence. The court is to assume that the facts pleaded are true and decide if a cause of action is made out, (R. v. Imperial TobaccoCanada Ltd., 2011 SCC 42 at ¶22 and 23). [42] Whether a pleading discloses a cause of action is a question of law (Nova Scotia (Health) v.

Morrison Estate, 2011 NSCA 68at ¶11; Ring v. Canada (Attorney General), 2010 NLCA 20 at ¶34; Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444 at¶68). Even if the certification judge did not intend to consider evidence when determining the validity of the pleadings, the appellantsargue that he should have analyzed each cause of action, citing Morrison Estate at ¶23–40. Standard of Review: [43] The standard of review for questions of law is correctness. The respondents argue that the standard of review is notcorrectness.

They say that whether pleadings disclose a cause of action is a matter of “discretion” to which deference is owed, citingChrysler Canada Inc. v. Eastwood Chrysler Dodge Ltd., 2010 MBCA 75 and Campbell v. Flexwatt Corp. (1997), (BC CA), 98 B.C.A.C. 22 (BCCA), leave to appeal ref’d, [1998] S.C.C.A. No. 13, amongst others. Most of the cases to which the

respondents refer do not support this submission. For example, the respondents quote from Flexwatt: [25] … Of course, whether to certify a class proceeding is not a matter of discretion, strictly speaking, because s. 4(1) of the Actmandates certification if the criteria are met. The discretion resides in the assessment of the circumstances. This quotation appears in a paragraph in which s. 4 of the British Columbia Class Proceedings Act is discussed generally. The“circumstances” include questions of whether or not a class proceeding is the preferable procedure and whether there are common triableissues.

The “circumstances” in this context are not relevant in determining whether a pleading on its face discloses a cause of action. [44] Likewise the respondents rely on Eastwood: [24] … Although the question whether the pleading discloses a cause of action is one of law, the question whether it was plain andobvious that the pleading disclosed no reasonable cause of action is essentially a matter of discretion.

As a result, the standard of reviewon the motions judge’s decision on whether to strike out the counterclaim for disclosing no reasonable cause of action can be expressedas follows: absent an error in law or a palpable and overriding error on a question of fact, the decision of the motions judge is entitled todeference and this court will not intervene unless the decision is so clearly wrong as to amount to an injustice. See Towers Ltd. v.Quinton’s Cleaners Ltd. et al., 2009 MBCA 81, 245 Man. R. (2d) 70 at paras. 24-28. [45] In Eastwood, the Manitoba Court of Appeal relies on Towers Ltd. v.

Quinton’s Cleaners Ltd. et al., 2009 MBCA 81 at ¶24 to28. That case discusses the standard of review for a

summary judgment application on the evidence. In Towers, the court rightly notedthe highly deferential standard accorded such a decision. But that standard has no application to the pure question of law about whetheror not a cause of action is made out on the face of a pleading. [46] The respondents also rely upon the Alberta Court of Appeal decision on Elder Advocates of Alberta Society v. Alberta, 2009ABCA 403, rev’d 2011 SCC 24 which counsels a deferential standard, absent an error of law: [24] In certifying a class action, the certification judge is guided by the Class Proceedings Act.

Applying the legislated tests to theevidence involves questions of mixed fact and law. The certification judge is uniquely familiar with the factual context: Ayrton v. PRLFinancial (Alta.) Ltd., 2006 ABCA 88, 384 A.R. 1 at para. 3, and the court must be reluctant to interfere with the exercise of judicialdiscretion on the part of a case management judge in the context of complex litigation: Halvorson v. British Columbia (Medical ServicesCommission), 2008 BCCA 501, B.C.J. No. 2364 (B.C.C.A.) at para. 17.

Thus, absent an extricable error of law which attracts acorrectness standard, substantial deference is accorded to a judge certifying a class proceeding: Ayrton at para. 3, citing Campbell v.Flexwatt (1997), (BC CA), 44 B.C.L.R. (3d) 343 (B.C.C.A.) and Pearson v. Inco Ltd., (ON CA),[2005] O.J. No. 4918 (Ont.

C.A.). [Emphasis added] [47] The deference referred to here does not extend to the extricable legal question of whether a cause of action is disclosed on theface of the pleadings, but to non-pleading issues. [48] What is confusing about Elder Advocates is the following: [45] … our role at this stage is not to weigh all the relevant evidence or determine who is right or wrong, but to determine whether thecertification judge committed a palpable and overriding error in concluding that the respondents showed some basis in fact that thereexists a cause of action: Windsor at paras. 42 and 50. [Emphasis added] [49] The Alberta Court of Appeal here refers to Windsor v.

Canadian Pacific Railway Ltd., 2006 ABQB 348, aff’d 2007 ABCA294. Windsor was not a case involving an attack on pleadings, but rather whether the evidence met the applicable criteria of the AlbertaClass Proceedings Act. This quotation could be read as suggesting a palpable and overriding error standard for assessing the existence ofa cause of action, which would be wrong in law. But it is not obvious that the court intended such a meaning. Certainly the SupremeCourt of Canada’s review of Elder Advocates did not assume that

interpretation because the court accorded no deference on the questionof whether causes of action were made out. As Chief Justice McLachlin said: [4] This is not a decision on the merits of the action, but on whether the causes of action pleaded are supportable at law. Thequestion is whether the pleadings, assuming the facts pleaded to be true, disclose a supportable cause of action.

If it is plain andobvious that the claim cannot succeed, it should be struck out. [5] I conclude that the pleas of fiduciary duty, negligence and bad faith in the exercise of discretion disclose no cause of actionand should be struck out in their entirety, but that the claim of unjust enrichment should survive.

It follows that the certification of theclass is upheld, and the unjust enrichment claim may proceed to trial, together with the claim for discrimination under s. 15(1) of theCharter. [Emphasis added] No deference to the certification judge appears here. [50] Likewise in Hollick, Chief Justice McLachlin said: 25 I agree that the representative of the asserted class must show some basis in fact to support the certification order.

As the court inTaub held, that is not to say that there must be affidavits from members of the class or that there should be any assessment of the meritsof the claims of other class members. However, the Report of the Attorney General’s Advisory Committee on Class Action Reformclearly contemplates that the class representative will have to establish an evidentiary basis for certification: see Report, at p. 31(“evidence on the motion for certification should be confined to the [certification] criteria”).

The Act, too, obviously contemplates thesame thing: see s. 5(4) (“[t]he court may adjourn the motion for certification to permit the parties to amend their materials or pleadings or

to permit further evidence”). In my view, the class representative must show some basis in fact for each of the certification requirementsset out in s. 5 of the Act, other than the requirement that the pleadings disclose a cause of action.

That latter requirement is of coursegoverned by the rule that a pleading should not be struck for failure to disclose a cause of action unless it is “plain and obvious” thatno claim exists: see Branch, supra, at para. 4.60. [Emphasis added] The court then went on to analyze the issues assuming the facts and the pleading to be true and determined whether the causes of actionpleaded were sustained in law. [51] The correctness standard of review has also been applied in Anderson v.

Canada (Attorney General), 2011 NLCA 82 at ¶38;Ring at ¶34; and Fresco at ¶65 and 68. [52] It is clear from most of the cases on which the respondents rely that any deference accorded to a certification motions judgedoes not extend to the question of whether a cause of action is made out on the pleadings. To the extent that a deferential standard maybe intended by any of the authorities, we would respectfully decline to follow them. [53] The CPA is procedural not substantive. It does not relax the standard that pleadings must disclose a cause of action on theirface. The test is not onerous.

Pleadings are adequate provided that it is not “plain and obvious” that the cause of action will fail, ElderAdvocates (SCC) at ¶20; Hollick, at ¶25; Hunt v. Carey Canada Inc., (SCC), [1990] 2 S.C.R. 959 at p. 980. Canadasubmits that compliance with the need for pleadings to disclose a cause of action is especially important in class actions, because: 1. A defendant should not be subjected to any claim that does not disclose a proper cause of action, particularly one asserted onbehalf of an entire class; 2.

The claims asserted in the pleadings have an impact on the question of common issues, as common issues cannot be establishedbased on causes of action that are not properly pled; and The nature of the claim advanced determines the proper members of the class. (Citing Pearson v. Inco Ltd., [2002] O.J. No. 2764 (S.C.J.) at ¶84; also Morrison Estate, at ¶28 and 40) [54] The respondents rightly argue that pleadings must be read generously to allow for inadequacies owing to drafting frailties andthe respondents’ lack of access to documents and discovery, citing Hunt, and Anderson v. Wilson, (ON CA), [1999]O.J.

No. 2494 (Ont. C.A.), leave to appeal ref’d, [1999] S.C.C.A. No. 476. But two cautionary notes warrant mention here. First, theStatement of Claim has already been amended numerous times and ample opportunity has been afforded the respondents to pleadcorrectly. Second, the generosity of

interpretation counselled by Hunt does not overcome pleaded facts inconsistent with the underlyingcause of action and cannot supply factual omissions in such pleadings. For example, in Imperial Tobacco, Chief Justice McLachlinemphasised the need to plead facts necessary to a cause of action: [24] This is not unfair to the claimant. The presumption that the facts pleaded are true operates in the claimant’s favour. Theclaimant chooses what facts to plead, with a view to the cause of action it is asserting.

If new developments raise new possibilities – asthey sometimes do – the remedy is to amend the pleadings to plead new facts at that time. [55] The failure to plead all facts material to a cause of action will usually result in a striking out of the pleading. In 3021386Nova Scotia Ltd. v. Barrington (District), 2010 NSSC 173, Justice Duncan cited English and Canadian authorities: [15] The defendants have submitted legal authority as to the consequences of the failure to plead a material fact, which is central tocertain of their arguments. In Bruce v.

Odhams Press Ltd., [1936] 1 K.B. 697, at pp. 712-713, 1 All E.R. 287 at pp. 294-295, Scott, L. J.wrote: The cardinal provision in rule 4 is that the statement of claim must state the material facts.

The word “material” means necessary forthe purpose of formulating a complete cause of action; and if any one “material” statement is omitted, the statement of claim is bad; itis “demurrable” in the old phraseology, and in the new is liable to be “struck out” under RSC Ord XXV, r 4 (see Philipps v Philipps); ora further and better statement of claim may be ordered under rule 7. … [16] The defendants rely on the decision of Rosenberg J. in Region Plaza Inc. v. Hamilton-Wentworth (Regional Municipality) (1990), (ON SC), 12 O.

R. (3d) 750, at para. 5, where he held that: Under rule 25.06, the plaintiff must plead all material facts on which it relies and must plead all of the facts which it must prove toestablish a cause of action which is legally complete. If any material fact is omitted, the statement of claim is bad and the remedy is themotion to strike the pleading, not a motion for particulars. [Emphasis added] [56] Collectively the appellants assert that the Statement of Claim does not disclose good causes of action for: 1. Strict liability (Rylands v. Fletcher) 2. Trespass 3. Battery 4. Nuisance

Each will be addressed in turn. Rylands v. Fletcher: [57] The rule in Rylands v. Fletcher ((1866), L.R. 1 Ex. 265 (Ex. Ch.) aff’d (1868), L.R. 3 H.L. 330) emerges from 19th centuryjurisprudence which imposes strict liability on a land occupier who brings something on his land which subsequently escapes causingdamage to his neighbour. Lord Cranworth put it this way: If a person brings, or accumulates, on his land anything which, if it should escape, may cause damage to his neighbour, he does so at hisperil.

If it does escape, and cause damage, he is responsible, however careful he may have been, and whatever precautions he may havetaken to prevent the damage. Other descriptions emphasise the potentially dangerous character of that which is accumulated by a defendant, implying the likelihood ofdamage if it escapes from a defendant’s property, (e.g. Justice Blackburn’s “anything likely to do mischief” description in the ExchequerChamber in Rylands v. Fletcher). [58] In Smith v. Inco Ltd. (2011 ONCA 628), rev’d 2010 ONSC 3790 (Ont. S.C.J.), leave to appeal denied, [2011] S.C.C.A.

No.539, the Ontario Court of Appeal describes the rule’s status in Canada: [68] The rule in Rylands v. Fletcher imposes strict liability for damages caused to a plaintiff’s property (and probably, in Canada, forpersonal damages) by the escape from the defendant’s property of a substance “likely to cause mischief”. The exact reach of the ruleand the justification for its continued existence as a basis of liability apart from negligence, private nuisance and statutory liability havebeen matters of controversy in some jurisdictions: see Transco plc v.

Stockport Metropolitan Borough Council, [2004] 2 A.C. 1 (H.L.);Burnie Port Authority v. General Jones Pty. Ltd. (1994), 179 C.L.R. 520 (Aust. H.C.); Murphy, “The Merits of Rylands v. Fletcher”. InCanada, Rylands v. Fletcher has gone largely unnoticed in appellate courts in recent years. However, in 1989 in Tock, the SupremeCourt of Canada unanimously recognized Rylands v. Fletcher as continuing to provide a basis for liability distinct from liability forprivate nuisance or negligence. [59] Liability for breach of the rule in Rylands v.

Fletcher is usually described as strict; that is to say it is no defence that whatescaped and caused damage did so without a defendant’s neglect. But some defences may be available, (e.g. act of a stranger; “act ofGod”; acquiescence of the plaintiff, to name some). [60] In Smith v. Inco, the Ontario Court of Appeal refers to four pre-requisites for establishing liability under the rule in Rylands v.Fletcher. In doing so they incorporate the criteria set out by Gregory S. Pun and Margaret I. Hall, in The Law of Nuisance in Canada(Markham, Ontario: LexisNexis Canada Inc., 2010) at p. 113:

a) the defendant made a non-natural use of his land;

b) the defendant brought onto his land something which was likely to do mischief if it escaped [the requirement of dangerousness];

c) the substance in question escaped; and

d) damage was caused to the plaintiff's property (or person) as a result of the escape. [61] All formulations of the tort involve at least two elements: there must be an escape from property occupied by the appellant;and the use of land by the appellant must be “non-natural”, “out of the ordinary” or “special”. Recently in the United Kingdom theHouse of Lords has replaced “non-natural use” with “quite out of the ordinary in the place and at the time when [the defendant] does it”,(Transco plc v.

Stockport Metropolitan Borough Council, [2004] 2 A.C. 1 (H.L.), [2004] 1 All E.R. 589, hereafter, all citations are fromthe All E.R.s). Also see: Lewis N. Klar, Q.C., Tort Law, 5th ed (Toronto: Carswell, 2012) at 646 to 653). Non-Natural Use: [62] The appellants complain that the respondents have not adequately pleaded “non-natural or unusual” use of the property by theappellants. The respondents plead that storage and release of contaminants from the property constituted a “non-natural use of thelands”, (¶66 of the Statement of Claim).

The appellants object that this conclusory allegation of “non-natural” use is unsupported byexplanatory facts, or indeed, the other facts alleged by the respondents. [63] The “non-natural” or “special use” requirement of strict liability has attracted some debate in the jurisprudence. But theauthorities do not support the argument that operating a steel mill or coke ovens alone constitutes an unnatural use of land. In Tock v.

St.John’s Metropolitan Area Board, (SCC), [1989] 2 S.C.R. 1181, La Forest, J. observed at p. 1189: The definitive statement of the meaning to be ascribed to Lord Cairn’s qualification in Rylands v. Fletcher, at pp. 338-39, that strictliability would only attach in respect of “non-natural user” of land is generally agreed to be that of Moulton L.J. in Rickards v. Lothian,[1913] A.C. 263, at p. 280. Moulton L.J. thus expressed himself: It is not every use to which land is put that brings into play that principle.

It must be some special use bringing with it increased dangerto others, and must not merely be the ordinary use of the land or such a use as is proper for the general benefit of the community. The courts, as noted by Fleming, The Law of Torts, 6th ed., at p. 308, have, on the basis of this qualification, interpreted the notion ofnon-natural user as a flexible concept that is capable of adjustment to the changing patterns of social existence. [Emphasis added] [64] Justice La Forest concluded (at p. 1190) that construction and operation of a sewer system was not a “non-natural” use ofland: In

summary, if, as argued by Prosser at p. 147 of his essay “The Principle of Rylands v. Fletcher,” in Selected Topics on the Law of

Torts, the touchstone for the application of the rule in Rylands v. Fletcher is to be damage occurring from a user inappropriate to theplace where it is maintained (Prosser cites the example of the pig in the parlour), I would hold that the rule cannot be invoked where amunicipality or regional authority, acting under the warrant of statute and pursuant to a planning decision taken in good faith, constructsand operates a sewer and storm drain system in a given locality. [65] This view was generally taken up by the Ontario Court of Appeal in Smith v. Inco: [95] Inco operated a refinery on its property.

The nickel emissions were part and parcel of that refinery operation and were not in anysense an independent use of the property. The use of the property to which the Rylands v. Fletcher inquiry must be directed is its use as arefinery. The nickel emissions are a feature or facet of the use of the property as a refinery. The question must be – was the operationof the refinery at the time and place and in the manner that it was operated a non-natural use of Inco's property?: see Gertsen v.Municipality of Metropolitan Toronto (1973), (ON SC), 2 O.R. (2d) 1 (H.C.), at pp. 19-20; David W.

Williams, “Non-Natural Use of Land” (1973) 32 Cambridge L.J. 310, at pp. 314-21. [96] The trial judge found that Inco's use of the property was a non-natural use because it brought the nickel on to the property. If thecharacterization of a use as a non-natural one was ever tied solely to whether the substance was found naturally on the property, it haslong since ceased to depend on the answer to that single question. It may be that something found naturally on the property cannot attractliability under Rylands v. Fletcher.

It is not, however, the law that anything that is not found naturally on the property can be subject tostrict liability under Rylands v. Fletcher if it escapes and causes damage. The disconnect between things found in nature on the propertyand the potential application of Rylands v.

Fletcher is so complete that the House of Lords has abandoned the use of the phrase "non-natural use" as misleading in favour of the phrase "ordinary use": Transco plc at paras. 11-12. [97] The emphasis in Tock at para. 13 on a “user inappropriate to the place” and, at para. 10, to "changing patterns of existence"demonstrate that the distinction between natural and non-natural use cannot be made exclusively by reference to the origin of thesubstance in issue.

To decide whether a use is a non-natural one, the court must have regard to the place where the use is made, thetime when the use is made, and the manner of the use.

Planning legislation and other government regulations controlling where, whenand how activities can be carried out will be relevant considerations in assessing whether a particular use is a non-natural use in the sensethat it is a use that is not ordinary. [Emphasis added] [66] The Ontario Court of Appeal went on to endorse Lord Bingham’s description of the inquiry that needs to be made: [101] The claimants bore the onus of showing that the operation of the refinery was a non-natural use of the property in the sense that itwas not an ordinary or usual use.

In Transco plc, Lord Bingham, at para. 11, suggests the following inquiry: An occupier of land who can show that another occupier of land has brought or kept on his land an exceptionally dangerous ormischievous thing in extraordinary or unusual circumstances is in my opinion entitled to recover compensation from that occupier forany damage caused to his property interest by the escape of that thing subject to defences ... [67] We are not at the stage of the inquiry referred to by the Ontario Court of Appeal in Smith v. Inco.

But the appellants assertthat none of the facts pleaded sustain the allegation that their use of their lands was “non-natural”, in the manner understood by thejurisprudence. As the respondents plead in ¶12 and elsewhere in the Statement of Claim, the steel works and coke ovens operated in thecommunity for almost 100 years. As in Smith v.

Inco, the emissions produced were a natural and ordinary consequence of the activitieslawfully carried on during that time by the appellants and their predecessors. [68] In effect, the Statement of Claim alleges that what was really the ordinary operation of a steel mill and coke ovens constitutes“non-natural” use within the Rylands v. Fletcher rule. The appellants are correct that a bare allegation of “non-natural” use will not do,particularly when the other facts pleaded, as here, may suggest otherwise.

The respondents have not pleaded that the operation of thesteel mill or coke ovens was non-natural in the context of the time, place and manner that it was operated (Smith v. Inco, ¶95 and 97). Nor do they say that the industrial uses of the lands by the appellants constituted a “special use bringing with it increased danger toothers”, (Rickards, ¶280; Tock, p. 1189; Smith v. Inco, ¶72, 90 and 99). But they do plead in ¶72 of the Statement of Claim that the“release of Contaminants [created] an abnormally dangerous and pervasive risk …”. Accordingly, certification of Rylands v.

Fletcher asa cause of action should not be refused based solely on this aspect of the respondents’ pleadings. That brings us to the escape criterion. Escape: [69] Escape is essential to liability under Rylands v. Fletcher.

As Klar in Tort Law puts it: Escape is thus essential to this concept, one which is narrow and not capable of extension to a wider principle of strict liability forultrahazardous activities (citing English authorities). [70] Klar argues that the escape requirement is somewhat more relaxed in the Canadian context where an “escape of gas or water,running through pipes under public streets, or stored in underground tanks, for example, has frequently been satisfactory for theapplication of the Rylands principle”, (pp. 652 and 653). [71] However characterized, the appellants assert that “escape” is an essential element of the tort and must be pleaded.

Canadaacknowledges that the word “escape” is used in the Statement of Claim, but says that facts necessary to support that allegation arelacking. Indeed, Canada argues that the underlying facts pleaded are inconsistent with an allegation or plea of escape.

[ 72 ] In Smith v. Inco , the Ontario Court of Appeal contrasted escape with the regular and intended use of land: [74] … In finding that the nickel particle emissions “escaped” from the Inco refinery, the trial judge did not refer to the fact that the emissions were an integral part of Inco’s refinery operation and were released by Inco intentionally on a daily basis for 60 odd years. [ 73 ] Later the court elaborated on the escape criterion: [112] The second issue pertaining to the escape requirement arises from the nature of the risk to which strict liability under Rylands v. Fletcher applies.

As explained earlier (see paras. 83-84, 96-97), the Rylands v. Fletcher paradigm involves an unnatural use of the defendant's property and some kind of mishap or accident that results in damage. The application of Rylands v. Fletcher to consequences that are the intended result of the activity undertaken by the defendant has been doubted : North York (City) v. Kert Chemical Industries Inc . (1985), 33 C.C.L.T. 184 (Ont. H.C.) ; Lewis N. Klar, Tort Law , 4th ed. (Toronto: Carswell, 2008), at p. 628; The Law of Nuisance in Canada , at pp. 132, 137. [113] We, too, doubt its application.

It is one thing to impose strict liability for mishaps that occur in the course of the conduct of an unnatural or unusual activity. It is quite another to impose strict liability for the intended consequence of an activity that is carried out in a reasonable manner and in accordance with all applicable rules and regulations . [Emphasis added] [ 74 ] Canadian law does not recognize strict liability for engaging in dangerous activities, per se . This is clear from the judgment of Justice La Forest, in Tock , as the Ontario Court of Appeal emphasises in Smith v. Inco , (at ¶89-90).

If it were otherwise, there would be no need to constrain strict liability by limiting it to an “unusual” or “special” use bringing increased danger to others. Similarly, it would be unnecessary to limit recovery to cases of unintended “escapes”, if the law embraced strict liability for hazardous activities simpliciter . As Klar observes on this point: “… As a narrow principle of strict liability for innocent but damaging uses of land by neighbours, the requirement of an accidental release is explicable.

As a wider principle of strict liability for dangerous activities, it is not.” (p. 653). [ 75 ] The escape requirement is explicit in the original decision of Rylands v. Fletcher . The authors of The Law of Nuisance in Canada explain the relation between the “escape” criterion and strict liability, at pp. 131-132: Creation of extraordinary risk is not, in and of itself, sufficient to establish liability under Rylands ; escape, from property under the control of the defendant to a place outside of his or her control, is also required. The requirement of escape distinguishes Rylands v.

Fletcher from the American doctrine of ultrahazardous activities and situates Rylands as, like nuisance, a land tort. Rylands liability is “strict” because the escape, the proximate, factual cause of the plaintiff’s damage, is not directly effected by the defendant’s intentional or negligent act . The necessary causal connection between the defendant’s conduct and the plaintiff’s damage lies in the creation of extraordinary risk which precedes that escape.

In this respect, Rylands is consistent with other strict liability torts, in which the proximate cause of damage (the wild animal, or the conduct of an employee in vicarious liability) is also outside, and separated from, the immediate conduct of the defendant.

Where the escape is the direct result of the defendant’s conduct (an intentional or negligent discharge or release), negligence, trespass, or possibly nuisance, will be the appropriate cause of action (although Rylands has, inappropriately, been applied to an intentional release). [Emphasis added] [ 76 ] The foregoing found favour with the Ontario Court of Appeal in Smith v. Inco : [82] Returning to the merits of the strict liability theory adopted by the trial judge, we begin by distinguishing the risk that is targeted by that theory from the risk targeted by the rule in Rylands v. Fletcher .

Strict liability under Rylands v. Fletcher aims not at all risks associated with carrying out an activity, but rather with the risk associated with the accidental and unintended consequences of engaging in an activity . The Rylands v. Fletcher cases are about floods, gas leaks, chemical spills, sewage overflows, fires and the like. They hold that where the defendant engages in certain kinds of activities, the defendant will be held strictly liable for damages that flow from mishaps or misadventures that occur in the course of that activity. The escape requirement in Rylands v.

Fletcher connotes something unintended and speaks to the nature of the risk to which the strict liability in Rylands v. Fletcher attaches: see The Law of Nuisance in Canada at pp. 132, 137. [Emphasis added] [ 77 ] It is apparent that concepts such as “escape” and “non-natural” or “special” use have been employed by the courts as a means of limiting strict liability for dangerous activities. The word “escape” implies that the defendant had custody, possession, care or control of whatever causes the plaintiff damage and that the defendant’s loss of control was inadvertent.

This loss of control is not described as intentional; verbs suggesting intent such as “released”, “issued”, “loosed”, “discharged”, “transmitted” or “expelled” do not appear in the cases. This makes sense because the rule in Rylands v. Fletcher emerged in the context of compensating a plaintiff for the unintended consequences of otherwise intended activities of the defendant on his own property. Mr. Rylands did not intend to flood Mr. Fletcher’s mines with his reservoir. [ 78 ] Moreover, the word “escape” also implies that escape is not the ordinary or usual consequence of the defendant’s conduct.

Again the authors of The Law of Nuisance in Canada describe the normal application of the rule at p. 132: The “essence of the Rylands v. Fletcher principle is that compensation is given for a single disastrous escape”, and there is a general consensus that the Rylands v. Fletcher doctrine does not apply in cases involving a continuing or continuous escape or interference (for which the appropriate cause of action is nuisance). Nevertheless, there have been cases in which single escape incidents were held to fall

under nuisance and, conversely, situations involving continuous escapes have been dealt with under Rylands. [79] While it is clear that liability under the rule in Rylands v. Fletcher has been imposed where there has been more than one“escape”, the traditional understanding of the rule as a discrete event is also consistent with escape being unintentional. [80] In our view the requirement of escape is inconsistent with the intentional release of something which causes damage.

Suchan intentional act more properly belongs to cases of trespass or nuisance – or possibly negligence where there is carelessness about thedamaging consequences of an intentional release. [81] The respondents’ allegations in nuisance and strict liability (i.e. Rylands v. Fletcher) are set out at ¶66-73 of the Statement ofClaim. In ¶66 they allege that the release of contaminants is a non-natural use of the lands and that the appellants failed to “prevent theescape of these Contaminants”.

They go on to allege that the contaminants “escaped” in several ways including, “… [f]rom the smokestacks at the Coke Ovens and Steel Plant”; as “dust blown from the Steel Works on the wind”; “[a]s effluent escaping from the CokeOvens washing into the soil” and “migrating in the air, soil and water into the adjoining Neighbourhoods”. [82] Despite repeated use of the word “escape”, the facts alleged by the respondents do not sustain this plea.

It is plain that theirsupportive language describes contaminants as the ordinary and regular by-product of the industrial activities carried on by the appellantsover the years in question. These allegations are not consistent with an unintentional release of these contaminants. The pleadings do notproperly describe an escape. This criterion of the rule in Rylands v. Fletcher is not met. [83] We agree with the appellants that the pleadings do not reveal a good cause of action based on the rule in Rylands v. Fletcher.

Trespass to Land: [84] The appellants point out that directness has been a required element of trespass, battery and negligent battery because thesetorts were designed to restrain breaches of the King’s peace which were most likely to provoke retaliation. That is why these torts areactionable without proof of damage. The conduct itself was so serious that the law needed to proscribe it irrespective of injury, to avoidcivil unrest, (Allen M. Linden & Bruce Feldthusen, Canadian Tort Law, 8th ed (Markham, Ontario: LexisNexis Canada Inc., 2006), pp.43-44; John G.

Fleming, The Law of Torts, 9th ed (Sydney: LBC Information Services, 1998) at p. 21). [85] The appellants say that the indirect nature of the interference with their land alleged by the respondents defeats any claim intrespass.

Klar, at p. 110 describes trespass in this way: The tort of trespass to land protects a person’s possession of land against wrongful interference. … It involves only directinterferences with the plaintiff’s possession of land, is actionable without proof of actual damage, and must be committed eitherintentionally or negligently in order to be actionable. [Emphasis added] [86] The appellants emphasise that the quality of directness is paramount and distinguishes trespass from nuisance, citing thisCourt’s decision in W. Eric Whebby Ltd. v.

Doug Boehner Trucking & Excavating Ltd., 2007 NSCA 92 at ¶127–130: [127] However, these submissions overlook a more fundamental point which, in my view, is fatal to United’s position: nuisance isconcerned with unreasonable interference with the enjoyment of land resulting from another’s conduct elsewhere. The interference withthe plaintiff’s enjoyment of land must be indirect rather than direct: see, e.g. Linden and Feldthusen at 559 - 560; Beth Bilson, TheCanadian Law of Nuisance (Toronto: Butterworths, 1991) at 14.

As the editor of Street on Torts put it in a passage cited withapproval in Royal Anne Hotel Co. v. Ashcroft, (BC CA), [1979] 2 W.W.R. 462 (B.C.C.A.), a person commitsprivate nuisance when he or she “... is held to be responsible for

an act indirectly causing physical injury to land or substantiallyinterfering with the use or enjoyment of land or of an interest in land ....”: Margaret Brazier, Street on Torts, 8th ed. (London,Edinburgh: Butterworths, 1988) at 314 - 315 (emphasis added). See also Hunter v. Canary Wharf Ltd., [1997] A.C. 655 (H.L., Eng.). Here, the damage was direct, not indirect; Whebby dumped the soil on United’s land. [128] The requirement for indirect rather than direct interference is not dependent on the defendant’s status in relation to the landwhere the nuisance originates.

On the question of what that status must be, there is a division of opinion: does the defendant have to bean owner or an occupier, or may he or she be simply a user or even a trespasser? … Whatever the answer to that question may be, thereis virtually no doubt that nuisance is concerned with indirect, not direct, interference with the plaintiff’s enjoyment of his or her landin the sense that the interference must originate elsewhere than on the affected land itself. … [Citations omitted] … [130] This view is also consistent with first principles going back to the old forms of action.

That nuisance deals with indirectinterference may be traced to the distinction between an action in trespass and an action on the case. Trespass is direct entry onanother’s land while nuisance is the infringement of the plaintiff’s property interest without direct entry by the defendant: see, forexample, John G. Fleming, The Law of Torts, supra at 464 - 465; Clerk and Lindsell on Tort, supra at 20-02; John P. S. McLaren,“Nuisance in Canada” in Allen M.

Linden, Studies in Canadian Tort Law, (Toronto: Butterworths, 1968) 320 - 377 at 338. [Emphasis in italics added, underlined emphasis in original] [87] The distinction between trespass and nuisance was noted by the English Court of Appeal in Southport Corporation v. EssoPetroleum Co. Ld,, [1954] 2 Q.B. 182 (C.A.) at p. 195 where a deliberate discharge of oil into the sea by a vessel in distress amounted tonuisance, but not trespass. Lord Denning observed:

...Quite recently, in Read v. J. Lyons & Co. Ld., Viscount Simon L.C. affirmed the same distinction when he observed that “thecircumstances in Fletcher v. Rylands did “not constitute a case of trespass because the damage was con- “sequential, not direct.” Applying this distinction, I am clearly of opinion that the Southport Corporation cannot here sue in trespass. This discharge of oil wasnot done directly on to their foreshore, but outside in the estuary. It was carried by the tide on to their land, but that was onlyconsequential, not direct. Trespass, therefore, does not lie. [88] The trial decision in Smith v. Inco Ltd., 2010 ONSC 3790, supplies a useful

summary of the trespass – nuisance distinction,emphasizing the need for directness in the former: [37] The essential characteristics of a trespass to land are concisely set out in Grace v. Fort Erie (Town), (ONSC), [2003] O.J. No. 3475 (S.C.J.) at para. 86, and in R. & G. Realty Management Inc. v. Toronto (City), [2005] O.J. No. 6093 (S.C.J.)at para. 40, as follows: 1. Any direct and physical intrusion onto land that is in the possession of the plaintiff; 2. The defendant’s act need not be intentional, but it must be voluntary; 3. Trespass is actionable without proof of damage; and 4.

While some form of physical entry onto, or contact with, the plaintiff’s land is essential to constitute a trespass, the act may involveplacing or propelling an object, or discharging some substance onto, the plaintiff’s land. [38] Clearly, one distinction between nuisance and trespass is that a trespass must be a direct intrusion onto the plaintiff’s lands,whereas a nuisance may be an indirect intrusion. In the present case, Inco submits that any intrusion onto the class members’ lands hasbeen indirect, and therefore does not constitute a trespass. A good statement of this distinction is set out in R.V.F.

Heuston & R.A.Buckley, Salmond and Heuston on the Law of Torts, 21st ed., (London: Sweet & Maxwell, 1996), at page 44: It is a trespass, and therefore actionable per se, to directly place material objects upon another’s land; it is not a trespass, but at the most anuisance or other wrong actionable only on proof of damage, to do

an act which consequentially results in the entry of such objects. Tothrow stones upon one’s neighbour’s premises is the wrong of trespass; to allow stones from a ruinous chimney to fall upon thosepremises is the wrong of nuisance. [39] In my view the circumstances of the present case are closer to the defendant allowing stones from a ruinous chimney to fall ontoneighbouring properties as opposed to the defendant throwing stones onto the properties. [40] Two other court decisions are useful. In Eureka Oils Ltd. v. Colli, (MB KB), 25 Man.

R. (2d) 166 (Q.B.), saltwater leaked from a metal tank that was owned by the defendant onto the plaintiff’s land. The court held that this was an indirectintrusion onto the plaintiff’s land. The claim was allowed in nuisance, but not in trespass. [41] Similarly in the case of Southport Corporation v. Esso Petroleum Co., [1954] 2 Q.B. 182 (Eng. C.A.), an oil tanker dischargedoil into the sea and the oil eventually washed up on the plaintiff’s land.

Again, this was held to be an indirect intrusion onto theplaintiff’s land, and a claim in trespass was not permitted. [42] In the present case, I find that Inco has permitted nickel particles to migrate from Inco’s property onto the class members’ lands. The circumstances in the present case are similar to those in the Eureka Oils case and the Southport case. Thus, I find that the intrusiononto neighbouring properties in this case is indirect, not direct. Therefore, I find that the class members do not have a claim in trespassagainst Inco.

The decision was overturned on other grounds, [2011 ONCA 628]. [89] As previously described, the certification judge declined to analyze the alleged causes of action in any detail. To repeat partof his comments more fully quoted above: [26] … The distinctions among nuisance, trespass and negligent or intentional battery and the mental element required for each canbe subtle (see G.H.L. Fridman, The Law of Torts in Canada 2d ed., (Toronto: Carswell, 2002), at pp. 37-8 and Philips v. CaliforniaStandard Co., (AB KB), [1960] 31 W.W.R. 331 (Alta.S.C.) at para. 7).

In this case, there is no indication to date ofany independent or intervening agency interrupting "direct" deposit of contaminants, and it is debatable whether material emitted maybe deemed non-physical because it consisted of small particles. [Emphasis added] [90] Presumably the emphasised words respond to the appellants’ submissions that the torts of trespass, battery or negligentbattery which require “directness” are not made out on the pleadings. But the words “… no indication to date …” suggest that the judgetreated this as a matter of evidence, not pleading.

With respect, the respondents do not plead that the appellants directly placed anythinganywhere. [91] In their Statement of Claim, the respondents allege:

74 All of the Defendants are liable in trespass in that each of them has discharged Contaminants, without the Plaintiffs’ and ClassMembers’ consent, onto lands owned by the Plaintiffs and Class Members as further particularized below. [92] The particulars which follow describe the contaminants as being “deposited” on the lands owned or occupied by therespondents. … “through the air in the form of vapour, particulate matter and dust, and through the earth and water migrating from theCoke Oven Lands and the Sydney Tar Ponds.” [93] The respondents do not allege that contaminants were directly placed on their lands.

There is no pleaded assertion ofdirectness which is a required element of the tort of trespass. Indeed the means by which the respondents say the alleged contaminantsfound their way to their lands are plainly indirect. To paraphrase Southport and some of the other jurisprudence, any accumulation ofalleged contaminants on the respondents’ property was indirect and consequential, not direct. It is clear that the facts pleaded do notsustain the tort that is alleged. The plea of trespass is bad in law.

Battery and Negligent Battery: [94] The appellants say that the torts of battery and negligent battery have no place here and are also not properly pleadedbecause, like the tort of trespass, directness is required. In Norberg v.

Wynrib, (SCC), [1992] 2 S.C.R. 226, ¶26 (cited in1992 Carswell B.C. 155), the Supreme Court defined a battery as: … intentional infliction of unlawful force on another person. [95] In contrast, Klar at p. 56 notes that negligent battery arises from a: … direct, offensive, physical contact with the plaintiff as a result of negligent conduct [96] The respondents allege battery in this way: 63. The Steel Works Defendants are liable to the Plaintiffs and Class Members for having committed the intentional tort of battery.

During the period that each of them operated the Steel Works or a portion thereof (as set out above), they knew or were substantiallycertain, as a result of (

a) in the case of Canada, Nova Scotia and SYSCO the Katz Study, Choquette Study, and the Havelock Study, the Kilotat Study, theHildebrand Study, the Atwell Study and the Furimsky Study that people living in the Neighbourhoods would inhale, ingest and have dermal exposure to the Operational Emissions and Tar PondsContaminants produced by the Steel Works.

The Steel Works Defendants knew what these emissions contained, and that inhalation,ingestion and dermal exposure to the Operational Emissions and Tar Ponds Contaminants constituted a non-trivial interference with thebodily security of the Plaintiffs and Class Members.

The Steel Works Defendants intentionally continued to emit the OperationalEmissions and Tar Ponds Contaminants, with full knowledge and intention that the Plaintiffs and Class Members would be exposed tothem. [97] Alternatively, the respondents plead negligent battery arising from operation of the steel works which: [64] … caused the Contaminants to come into contact with the Plaintiffs and Class Members.

Despite their knowledge that this contactwould occur if they failed to take adequate steps to prevent it from occurring … the Steel Works Defendants continued to emit theContaminants without regard to the fact that those Contaminants would come into contact with and cause harm to the Plaintiffs andClass Members as a direct result of their conduct. [98] The respondents’ pleading here and elsewhere in the Statement of Claim makes it plain that exposure to the contaminantsalleged was not direct, but an indirect consequence of the industrial activities carried on by the appellants.

Paragraph 64 of the Statementof Claim alleges that operation of the steel works itself caused negligent battery. [99] The necessity that trespass to the person (battery) requires direct interference was confirmed by the Supreme Court ofCanada in Non-Marine Underwriters, Lloyd’s of London v. Scalera, 2000 SCC 24 at ¶11 where Justice McLachlin (as she then was) saidspeaking for the majority: I agree with Sullivan’s view that the traditional approach to trespass to the person [i.e., battery] remains appropriate in Canada’s moderncontext for a number of reasons.

First, unlike negligence, where the requirement of fault can be justified because the tortious sequencemay be complicated, trespass to the person is confined to direct interferences. [Emphasis added] [100] The respondents have not pleaded directness. Nor do the supporting facts on which they rely sustain such a plea. Nuisance: [101] In their Statement of Claim, the respondents plead nuisance and strict liability (Rylands v. Fletcher) together. For reasonsalready described Rylands v. Fletcher is not properly pleaded.

But nuisance is broader. [102] As Justice La Forest said in Tock, when summarizing liability on Rylands v. Fletcher principles: To characterize a given use of land as appropriate to that locality does not, however, provide an answer to the question whether damageoccasioned by that activity constitutes a nuisance. It is to that question that I now turn. [103] Klar at p. 757 cites the House of Lords judgment in Hunter v. Canary Wharf Ltd., [1997] A.C. 655 (H.L.) which characterizesprivate nuisances as of three kinds:

(1) nuisance by encroachment on a neighbour’s land; (2) nuisance by direct physical injury to a neighbour’s land; and (3) nuisance by interference with a neighbour’s quiet enjoyment of his land. [104] In Smith v. Inco, the Ontario Court of Appeal quoted the Supreme Court of Canada referring to two kinds of nuisance: [42] In St. Pierre v. Ontario (Minister of Transportation and Communication), (SCC), [1987] 1 S.C.R. 906, at para.10, McIntyre J. for the court, accepted as a working definition of private nuisance, the definition found in an earlier edition of Street onTorts: A person, then, may be said to have committed the tort of private nuisance when he is held to be responsible for

an act indirectlycausing physical injury to land or substantially interfering with the use or enjoyment of land or of an interest in land, where, in the lightof all the surrounding circumstances, this injury or interference is held to be unreasonable. [Emphasis added by the Ontario Court of Appeal in Smith v.

Inco] [105] In Whebby, Cromwell, J.A. (as he then was) rejected a nuisance claim arising from contaminated soil used as residentiallandfill on the basis that the interference had been direct and not indirect: … there is virtually no doubt that nuisance is concerned with indirect, not direct interference with the plaintiff’s enjoyment of his or herland in the sense that the interference mus

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