On November 20, 2008, the Supreme Court of Canada rendered its long-awaited decision in St. Lawrence Cement Inc. v. Barrette.1 The matter involved class proceedings brought on behalf of a group of persons residing in the vicinity of St. Lawrence Cement’s cement plant located near Quebec City. The class action sought compensation for annoyances and disturbances suffered as a result of dust, smells and noise produced by the operations of the plant. At issue was whether liability for nuisance in Quebec law requires a finding of fault.

The Supreme Court held that St. Lawrence Cement had respected all applicable environmental legislation, had invested millions of dollars to obtain the best available antipollution equipment, had hired an environmental manager, had a maintenance team responsible for keeping the equipment in good working order and had not engaged in any form of wrongdoing that would justify a finding of fault. Nevertheless, the Court interpreted Quebec law as incorporating a regime of no-fault liability for neighbourhood disturbances and, on that basis, held St. Lawrence Cement liable for inconvenience inevitably caused to its neighbours.

JUDGMENT OF THE SUPREME COURT

The question of whether liability for nuisance in Quebec law requires proof of fault has long divided the courts and commentators. In its St. Lawrence Cement decision, the Supreme Court concluded that a no-fault liability regime for nuisance operates parallel to the general fault-based regime. According to the Court, prior to the adoption of the Civil Code of Québec in 1994, several decisions, although relying generally on the fault-based liability regime, explicitly recognized the principle that an owner must compensate neighbours for any excessive annoyances he or she causes. The Court also relied on the adoption of Article 976 of the Civil Code of Québec in 1994. While this provision imposes a passive obligation of tolerance and is silent on the issue of liability resulting from neighbourhood annoyances, the Court concluded that it codifies a line of authority according to which owners are not exempted from liability for damage associated with excessive annoyances caused to their neighbours. The Court held that this no-fault regime protects the rights of tenants as well as those of land owners.

APPLICATION OF THE NO-FAULT REGIME

The existence of a no-fault liability regime will certainly facilitate other class proceedings against both public and private undertakings that cause annoyance to neighbours. Debate in such cases will not focus on the defendant’s conduct, but on the results of that conduct. In this regard, the adoption of a no-fault regime will raise a number of issues for which the St. Lawrence Cement decision provides little guidance.

Future cases will have to determine what inconveniences are considered abnormal. A finding of abnormality necessarily implies comparison to some standard or norm. Identifying that norm will be crucial. Also of fundamental importance is characterization of the appropriate neighbourhood as this should directly impact the applicable standard of tolerance. For instance, the vicinity of a cement plant or paper mill is, no doubt, quite different from a quiet residential neighbourhood. Although respecting the applicable zoning bylaws will not be a defence, such bylaws may be relevant to defining a standard for the neighbourhood as they set out the uses which can be reasonably expected and tolerated in any particular neighbourhood. The Court did not address how the standard of tolerance should be determined.

POLICY CONSIDERATIONS

The Court suggests that no-fault liability furthers environmental objectives by reinforcing the polluterpay principle. The extent to which no-fault liability actually furthers environmental protection is questionable. To begin with, the regime applies to all forms of neighbourhood annoyances irrespective of the existence of pollution in any significant sense. Moreover, no-fault liability may just as readily act as a constraint on or impose liability in respect of environmentally-friendly activities as in respect of truly polluting activities. For instance, activities such as public transit or recycling operations may be a source of significant annoyance for neighbours although ultimately beneficial for the environment. In such cases, no-fault liability can hardly be viewed as furthering environmental protection.

In reality, no-fault liability is more about striking a balance between the competing rights of private parties. Issues of environmental protection involve complex determinations that cannot be properly addressed in the context of a lawsuit between private parties. Ultimately, policy makers will have to reflect on whether the balance struck by the Court between private rights is appropriate given the significant consequences of no-fault liability for business and the existence of a comprehensive statutory and regulatory scheme aimed at ensuring environmental protection.