Canadian lakes are shared common resources governed by overlapping municipal, provincial and federal laws. They are also often surrounded by private property – cottages, marinas and so on. Users, whether through discharges, odours, sounds or appropriation of the public space, dramatically affect others’ uses and enjoyment. Hence, the very recent rise of judicial certification of lake and pond class actions seeking to protect the interests of all.

TRESPASS BY FLOODING A COMMON ISSUE

The Ontario Superior Court recently certified a lake class action, Plaunt v. Renfrew Power 5, involving control of water levels on Round Lake, fed by waters from Algonquin Park. Renfrew Power operates a dam on the lake. The Ontario government in 1917 issued a license permitting the hydro-electric facility to raise the lake’s water level and flood surrounding lands to an elevation of 107.5 feet.

As with lakes across Canada, Round Lake gets heavy spring water in-flows. The plaintiffs complain that water levels rise above the permitted level eroding and immersing their properties. The claim centers on the 1917 license creating a contour line between public and private lands – a shoreline for properties. The allegation is that the company’s practices constitute trespass.

In an effort to defeat certification, Renfrew Power argued that the proper cause of action is not in trespass but rather in nuisance which requires individual proof of adverse effect. However, in certifying the class action, the Judge found a plausible cause of action in trespass and concluded that whether the 1917 license created a property line between public and private lands is a common issue now to be decided by a summary judgment process.

EARLIER LAKE CASES NOT CERTIFIED

Renfrew Power is the first lake class action certified in Canada – a harbinger of claims to come and a reflection of experience gleaned from two earlier cases where certification was defeated.

In the first case6, six cottage owners in Alberta brought a class action on behalf of 600 “similarly-situated” landowners. They claimed thermal pollution from an electrical generating plant affected the lake’s water level and interfered with the use and enjoyment of their properties. The complaints included excessive weed growth, poor water quality, unstable winter ice, reduced well yield, and unpleasant odour. In declining to certify the class action, the Alberta judge stated:

Here, the nature of the action – Rylands v. Fletcher, riparian and littoral rights, and nuisance – are causes of action in which proof of individual loss is a component of the determination of liability. Class members cannot be identified without first determining who suffered harm, and that determination is integrally dependant upon the merits of the action.

The second case7 involved a railway accident near Lake Wabamun in Alberta. Oil was spilled into the lake. The proposed class action claimed damage to lands within a five-kilometre radius of the lakeshore. According to materials filed with the court, plaintiffs eventually discontinued because the “vibrant real estate market in Alberta, and particularly the real estate market for lake properties” made it impractical to prove damage to the lands notwithstanding the spill.

SYDNEY TAR PONDS CLAIMS CLASS CERTIFIED

Shortly after Renfrew Power, the Nova Scotia Supreme Court certified a very significant environmental class action against the governments of Nova Scotia and Canada with respect to Sydney’s infamous tar ponds.8 The class includes property owners within two miles of the ponds. They seek property damages arising from exposure to toxins. The claim includes funds for medical monitoring of the risks posed by emissions.

Although the Sydney tar ponds certification order has yet to be finalised, the Judge certified breach of fiduciary duty, strict liability, negligence, battery and trespass as common issues. Unlike the Alberta cases mentioned above, the Nova Scotia court was not deterred by the fact that some property owners in the class will not likely be able prove a claim.

THE NEW SPLASH

Lake cases raise classic tragedy of commons issues and as such, provide useful reference points for environmental class actions generally. Of course environmental claims are not always well-suited for class action. Personal injury claims in particular are not appropriate for class action and the Judge in the Sydney tar ponds case repeatedly mentioned that the absence of personal injury claims made the case certifiable – in the same way the Port Colborne case was certified for class action against Inco regarding nickel emissions.

As exemplified by recent certification of lake and pond (as well as contaminated groundwater) claims, environmental class actions pose serious exposure for Canadian businesses. Management programs need to be in place to minimize the risk. The defence of environmental class claims involves, amongst other things, a proactive communications policy, a community-company integration program, and an individual and very streamlined complaints resolution strategy, all cumulatively designed to ward off advancement of a class action in the first place.