ONCA Rejects Nuisance Claim Against Former Owner: French v Chrysler

Nuisance, defined as an unreasonable interference with the use and enjoyment of land, has long been understood as a statement of claim for disputes among neighbours. It is a basic characteristic of the tort that the alleged nuisance originates somewhere other than the plaintiff’s land. This characteristic was recently questioned in French v Chrysler Canada Inc.

The case dealt with a motion by Mark French, on behalf of 1317424 Ontario Inc., to add a nuisance claim against Chrysler for failing to remediate contaminated land that was later sold to 1317424 Ontario Inc. by a third party. French argued that the scope of nuisance has not been settled and therefore a claim of nuisance between owners of the same property should be allowed to proceed.

Both the Superior Court and the Court of Appeal (“ONCA”) rejected this argument (see 2014 ONSC 4573 and 2015 ONCA 104).

Overview

The land at issue operated as a foundry and asbestos insulation producer from 1918 to 1982. Chrysler acquired the land in 1987. It shut down all operations and began decommissioning the property, following the (then-applicable) Ministry of the Environment standards. It obtained a certificate that confirmed the property’s decommissioning in 1988. Chrysler sold the land to The D’Andrea Group Inc. in 1989.

Nine years later, 1317424 Ontario Inc. purchased the property from D’Andrea. After discovering the property remained contaminated and was unsuitable for development, French commenced proceedings against Chrysler for negligence in decommissioning of the property as well as negligent misstatement of the property’s remediation.

As indicated above, French later sought to amend its statement of claim and add a nuisance claim against Chrysler. It argued that by failing to remediate, Chrysler caused an unreasonable interference with the use and enjoyment of land. Chrysler opposed the amendment, taking the position that the claim was untenable at law.

French relied on Morguard Real Estate Investment Trust v ERM Canada Corp, 2012 ONSC 4195 [Morguard]. In that case, three property owners hired a remediation company to clean up contamination on their properties. The contamination originated on one of the properties, a dry cleaner, and spread to the other two. Two of the owners, including the dry cleaner, sued the remediation company in nuisance after it failed to adequately remediate the land. The issue addressed by the court was whether the remediation company, which did not own or occupy land adjoining the plaintiffs’ land, could be sued in nuisance. The court declined to strike the claim on that basis.

 Ontario Superior Court of Justice 

The motion judge rejected the corporation’s reliance on Morguard. He found the case did not address the issue of whether the nuisance must originate outside the property occupied by the plaintiff.

In Morguard, the contamination originated on the dry cleaner property and it flowed onto the other two properties. Since the remediation company was hired to clean it up and failed to do so, it is possible that it caused or contributed to the ongoing flow of contaminants. Morguard does not address how the dry cleaner could sustain a claim of nuisance on its own land.

The motion judge also rejected the claim because the corporation does not allege the property was contaminated during the time they owned the property. Citing Midwest Properties Ltd v Thordarson and Thorco Contracting Limited, 2013 ONSC 775, he found that the owner of a property alleging nuisance must prove that there has been an increase in contamination during its ownership.

Ontario Court of Appeal 

The ONCA agreed with the motion judge’s treatment of Morguard and reviewed additional caselaw that affirmed his conclusion. The Nova Scotia Court of Appeal addressed the issue or whether nuisance must emanate from outside property directly in W. Eric Whebby Ltd v Doug Boehner Trucking & Excavation Ltd, 2007 NSCA 92.

In the case, the court found that regardless of who causes the nuisance, the nuisance must originate somewhere other than the plaintiff’s land. Cromwell J.A. (as he then was) stated:

[I]t is not the dead hand of ancient legal technicality that justifies maintaining this distinction. Rather, it reflects the role of the modern law of nuisance as a means of reconciling conflicting interests in connection with competing uses of land… Before there can be conflicting interests in connection with the use of land, there must be uses of different lands which come into conflict. (para 131)

In its decision, the ONCA drew a distinction between the expansion of nuisance to include new fact situations and fundamental changes to the tort. While the former is a tenable position, the latter is not.

Conclusion

French v Chrysler Canada Inc shows that the flexibility of the common law has limits. Where a plaintiff seeks to establish a tort where an essential characteristic is missing, it is extremely unlikely that a court will find the claim has a reasonable chance of success.