Source: http://www.juniperlaw.ca/blog-in-law/category/3-the-rule-in-rylands-fletcher-prospects-for-environmental-law-cases-in-canada
Timestamp: 2019-04-25 10:45:30+00:00

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Rule in Rylands and Fletcher: potential for Canadian environmental law cases?
This memorandum may be useful for those considering whether to pursue the rule in Rylands v Fletcher as a ground of action in environmental law cases. I review the status of the rule in Rylands v Fletcher in England, Australia and Canada. I then assess its utility for Canadian environmental cases by reviewing its recent treatment by the Ontario and Nova Scotia courts of appeal.
The rule in Rylands v Fletcher, as originally formulated, holds a defendant strictly liable for damages caused by an escape of something from her or his property that is attributed to a non-natural use of land. Non-natural use of land may include a special use of the land that increases the risk of harm to neighbours. It may include the use of dangerous substances, but not necessarily. In Rylands, the escaped substance was water in a reservoir built on Mr. Rylands’ property. The reservoir failed, the water flooded a neighbour’s (Mr. Fletcher’s) coal mine, and Mr. Rylands was held liable for the damages to his neighbour’s property, notwithstanding that he had not acted negligently.
The rule in Rylands is a form of strict liability (unlike the torts of nuisance and negligence) because the defendant may be liable even if she has acted reasonably, and taken reasonable care to prevent the escape. The rule, if applied successfully, allows a plaintiff to recover damages for an otherwise non-tortious event. Defences to the rule are consent, fault of the plaintiff or contributory negligence, act of god, acts of third parties, and statutory authority.
The rule in Rylands is a tort often associated with the emerging field of environmental law, although the rule itself long predates the modern concept of environmental law. It is applied in environmental cases where a plaintiff alleges damages from a pollutant or contaminant escaped from the defendant’s property. The rule in Rylands has been used to try to recover damages from herbicide drift, manure in wells, flooding of property, and contaminants from industrial operations. The utility of the rule in Rylands in environmental cases, however, may be waning. The rule has been narrowed in its home jurisdiction of England and abandoned in Australia. In Canada, recent decisions of the Ontario and Nova Scotia courts of appeal have reversed the positive use of the rule by lower courts; although they did not abrogate the rule they narrowed the potential scope of its application. Where does this leave the rule in Rylands for environmental cases in Canada?
What is the current status of the rule in Rylands v Fletcher in England, Australia and Canada?
What role is there for the rule in Rylands v Fletcher in Canadian environmental cases?
The rule in Rylands v Fletcher has been abandoned in Australia, and narrowed in England and Canada. Whatever form of broad strict liability it might once have been, it now has limited scope for environmental cases in both England and Canada. In England, the rule has been narrowed to a ‘sub-species’ of nuisance, the elements of which include non-ordinary use of the land and foreseeability of both the escape of the harmful thing in question, and the harm it causes. Remedies apply only for damages to property, not personal injury.
In Canada, the rule remains a tort separate from nuisance and negligence, unlike in England, but it has been narrowed. The SCC in Tock followed England’s lead in requiring a non-ordinary use of the land, that is, a use that is inappropriate to the time and place. In Tock, a sewer system was not deemed an inappropriate use of urban land, as it is a necessary component of modern urban life. In appeal court cases in Ontario (Smith v Inco Limited) and Nova Scotia (Canada (Attorney General) v MacQueen), a nickel refinery and a steel plant, respectively, were also considered to be ordinary uses of the land. In Ontario, the court of appeal also held that the escape element of the tort must be an inadvertent escape of the substance in question. The emissions of the nickel refinery were not unexpected or unintentional ‘escapes’ of the contaminants. The court also held that while foreseeability of an escape was not required (contrary to the rule’s evolution in England), foreseeability of the type of harm suffered by the plaintiff is a required element of the tort. Leave to appeal the Smith v Inco judgment to the SCC was denied. It remains to be seen whether other provinces will follow the lead of the Ontario Court of Appeal.
In summary, clients seeking remedies under the rule in Rylands v Fletcher should be wary. To be successful in the rule in Rylands v Fletcher, a plaintiff will likely have to bring forward a factual scenario that accounts for the limitations created by the SCC in Tock and, most likely, the limitations created by the Ontario Court of Appeal in Smith v Inco Limited. Nova Scotia plaintiffs must also consider the limitations created by the Nova Scotia Court of Appeal in Canada (Attorney General) v MacQueen. The likelihood of success for plaintiffs seeking remedies for historical contamination, in absence of negligence or trespass, is slim.
Blackburn J, speaking on behalf of the Court of Exchequer of Appeals, created the rule in Rylands v Fletcher when he stated in his decision that anyone who “brings on his lands and collects and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and, if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape.” Blackburn J gave several examples of such situations: “The person whose grass or corn is eaten down by the escaping cattle of his neighbour, or whose mine is flooded by the water from his neighbour’s reservoir, or whose cellar is invade by the filth of his neighbour’s privy… is damnified without any fault of his own….” Blackburn J concluded that in such situations, “it seems but just that he should at his peril keep it there so that no mischief may accrue, or answer for the natural and anticipated consequences.” Blackburn J held that the defendant is liable regardless of exercising all due care to prevent the escape.
Mr. Rylands appealed Blackburn’s decision to the House of Lords. In dismissing the appeal, Lord Cranworth upheld Blackburn’s judgment, but added a limitation requiring that the defendant’s land must have been used in a non-natural way to give rise to the tort.
The first major evolution in the rule in Rylands in England occurred with the House of Lords’ 1994 Cambridge Water Codecision. In this judgment, the House of Lords added foreseeability of harm as an element of the tort, explaining that foreseeability had been an intended element of Blackburn’s rule, but one which the courts had, up to then, failed to apply. The plaintiff in this case, a municipal water supply company created under statute, suffered damages when one of its water sources was contaminated by chemicals used by the defendant, Eastern Counties Leather, in their leather tanning process. The contaminating chemicals moved approximately 173 miles from the tanning operation to the plaintiff’s drinking water source via ground water movement. The House of Lords determined that it was unforeseeable that small spills of the chemicals (which cumulatively amounted to over 3,200 litres) would enter the aquifer, or injure a plaintiff 173 miles away. The House of Lords held that the plaintiff did not know that the chemical could escape, or that it would be harmful if it did.
Lord Goff J, in delivering the House of Lords’ decision in this case, suggested that Parliament, rather than the courts, ought to be responsible for regulating operations involving hazardous materials and activities. “… given that so much well-informed and carefully structured legislation is now being put in place for this purpose [of environmental protection], there is less need for the courts to develop a common law principle to achieve the same end….” Goff J also described the Cambridge case as a situation of historic pollution, and dismissed the notion of common law liability for historic pollution.
Ten years later, the House of Lords considered doing away with the rule in Rylands in Transco. Lord Hoffmann acknowledged that the rule is criticised as having little practical application (no successful application in England since the Second World War), being overly vague and addressing an issue better reserved for Parliament. He described the rule as an isolated victory for those who would have industrial operations internalize all of the costs of their operations. Lord Hobhouse made perhaps the most positive contribution to the House of Lords’ decision in stating that the rule retains an important role in English common law, which could be replaced only by an insurance system compulsory on every landowner using his or her land for dangerous purposes.
Despite the possible temptation to do away with the rule, Lord Bingham noted that “there is … a category of case, however small it may be, in which it seems just to impose liability even in the absence of fault.” Lord Hoffmann noted that the rule had been part of English law for 150 years, and that getting rid of it would be “too radical a step to take.” Thus rather than abrogate the rule, the House of Lords opted to clarify its application. First, the rule was described it as a version of nuisance, to be applied only in situations of a land owner or occupier causing damage to the property of another owner. Second, the rule requires that the activity in question give rise to an “exceptionally high level of risk” should the material or substance in question escape the property. The word “ordinary” should be substituted for the word “natural” in the test, thereby “making it clear that the rule in Rylands v Fletcher is engaged only where the defendant's use is shown to be extraordinary and unusual” with regard to the time and place of the incident. With respect to the facts of Transco, the water pipes that burst and which caused the injury to the plaintiff were not found to create a special hazard or unusual risk, thus did not meet the non-ordinary use requirement, as now required by the House of Lords.
The House of Lords recognized a policy issue at play in the rule in Rylands, between those who would require owners of businesses to internalize all costs of an enterprise, and those who would allow businesses to externalise costs onto neighbours provided they do not act negligently, in the name of economic efficiency. Hoffman J suggests that it is the latter view, of no liability without fault, that drives society now. Hobhouse J, nonetheless, supports the rule in Rylands as a manifestation of the principle that “he who creates the risk must bear the risk.” Even if the risk may be resolved in many instances through insurance, the rule should remain in force for those without the benefit of insurance. Hoffmann, on the other hand, suggested that those wishing to rely on the “esoteric” rule in Rylands in lieu of insurance should note the hefty price of litigation.
Australia first limited the rule in Rylands in 1913. In Rickards v Lothian, Moulton J narrowed the application of the rule to uses of land that (a) increased danger to others, and (b) were not ordinary uses of the land or for the general benefit of the community. “It is not every use to which land is put that brings into play [the rule in Rylands],” stated Moulton J.
The rule in Rylands v Fletcher has not been abolished in Canada, as in Australia, nor curtailed to the same extent (as discussed below) as in England. It has been, over the past century, effectively used as a successful action in situations of herbicide drift from an adjacent farm, contamination of a drinking well by manure, and escape of arsenic from a smelting operation. However, the Supreme Court of Canada narrowed its application in Tock v St John’s Metropolitan Area Board, and its potential effectiveness as an element of environmental law was diminished in two recent appeal-level cases: Smith v Inco in Ontario and Canada (Attorney General) v MacQueen in Nova Scotia. In both instances, the courts of appeal reversed the trial judges’ rulings in favour of the plaintiffs on the basis of the rule in Rylands.
In Tock, La Forest J agreed with Moulton J in Rickards v. Lothian that the rule in Rylands applies only to non-ordinary uses of land, which increase the danger to others, and which are not for the general benefit of the community. “The touchstone for the application of the rule in Rylands v. Fletcher,” stated La Forest, “is to be damage occurring from a use inappropriate to the place where it is maintained….” In this case, a sewer and storm water system became blocked, thereby flooding the plaintiff’s basement. La Forest J held that the operation of a sewage system under statutory authority was not a non-natural use of the land, and furthermore was an essential component of urban life.
In the Ontario Court of Appeal case Smith v Inco, Doherty JA overturned the trial decision that awarded the class action plaintiffs $36 million in damages for property injuries caused by Inco’s nickel refinery. Leave to appeal to the Supreme Court of Canada was denied. The trial judge had found that Inco was liable in both private nuisance and the rule in Rylands v Fletcher. Both of these grounds were overturned by the Appeal Court, along with the trial judge’s finding of injury.
Doherty JA recognized that despite the controversy over the rule in Rylands, the SCC confirmed in Tock that it was still good law, distinct from nuisance and negligence. He was, however, unconvinced that Inco’s operations from 1918 until the refinery closed in 1984 constituted an unnatural use of the land, or that they caused an abnormal level of risk to local residents, based on the findings of fact. The accumulation of nickel particles in the soil of residents’ properties was not an unanticipated consequence of operating the refinery. Doherty JA suggested that to invoke the rule in Rylands, the damages must result from “mishaps or misadventures” such as leaks, floods, chemical spill, or sewage overflow. Doherty JA noted that, in this case, “… Inco operated a refinery in a heavily industrialized part of the city in a manner that was ordinary and usual and did not create risks beyond those incidental to virtually any industrial operation.”  The lack of non-ordinary actions was enough for Doherty JA to reject the claim on grounds of the rule in Rylands.
Doherty JA also accepted the argument in Cambridge Water that it is Parliament’s role to impose strict liability on exceptionally dangerous activities or uses of land, and noted that in any event, dangerous activities attract their own standard of care under negligence. While Doherty recognized that Inco’s refinery operation was not intended for the general benefit of the community, he held that Inco’s refinery operation was not a particularly hazardous activity.
The Ontario Court of Appeal did not go so far as to require foreseeability of the escape as an element of the rule in Rylands, as the House of Lords held in Cambridge. Doherty JA noted that this would nearly subsume the rule in Rylands under the tort of negligence. However, Doherty JA did suggest it would be reasonable to require foreseeability of the kind of damages alleged by plaintiffs relying on the rule in Rylands. Could Inco have been reasonably expected to foresee diminution in property value appreciation of the plaintiffs’ property? While Doherty JA did not rule on this question, he may have asked this question to imply a doubt.
The Court also addressed the issue of whether Rylands applies only to isolated escapes of the offending substance. Contrary to the judgment in Cambridge, the Court held that the rule in Rylands could apply in cases of either isolated or repeated escape, noting that in some instances it is the cumulative effect of the escape of a substance over time that causes harm.
In Canada (Attorney General) v MacQueen, the Nova Scotia Court of Appeal allowed the appeal of the certification of MacQueen’s class action suit. The unanimous court (Oland, Farrar and Bryson JJA) held that the facts provided in the pleadings failed to disclose a cause of action in either trespass, battery, negligent battery, nuisance or the rule in Rylands v Fletcher.
The plaintiffs participating in the class action were residents in the vicinity of the Sysco Steel plant in Sydney, NS. Their statement of claim alleged that the operation of the steel plant and associated coke ovens resulted in thousands of tonnes of contaminants (heavy metals, polycyclic aromatic hydrocarbons, and particulates) entering the air, water and soils around the plant. The plaintiffs alleged that the contaminants accumulated in the former tidal flats near the plant, an area known as the Sydney Tar Ponds, and that the remediation plan proposed by the governments of NS and Canada failed to address the impacts of the contamination on residents and their property.
Citing the decisions of Tock and Smith v Inco, the court held that the operation of the steel mill and coke ovens was not an unnatural use of the land. “As in Smith v Inco,” the court stated, “the emissions produced were a natural and ordinary consequence of the activities lawfully carried on during that time….” The court noted that a bare allegation of non-natural use of the land is not enough to establish the rule in Rylands as a ground of action.
The court also defined the escape component of the rule as an inadvertent loss of control over the substance or thing in question, noting that in Rylands v Fletcher, Mr Rylands had no intention to permit the release of water from his reservoir, which caused the damage to Mr. Fletcher’s mines. The court held that the contaminants released from the steel mill operations were not inadvertent or unintentional. Rather, the contaminants were seen as the “ordinary and regular by-product” of the operation, thus the escape element of the rule in Rylands was not satisfied in the eyes of the court.
Academic writers on the subject of Rylands v Fletcher note the level of confusion with the application of the rule, the various ways it has been applied, and how it has been limited or qualified by judgments since its inception in the 1860s. American legal scholar A W Brian Simpson characterized Blackburn’s rule as a “throw-back to more primitive times” when strict liability (“man acting at his own peril”) was the norm. In 1993 (a year before the Australian High Court abolished the rule in Rylands), Australian law professor John Fleming opined that "(t)he aggregate effect of these exceptions [to the rule in Rylands v Fletcher] makes it doubtful whether there is much left of the rationale of strict liability as originally contemplated in 1866."
English lawyer Andrew Waite, writing in 2006, contended that the confusion in applying Rylands can be explained by recognizing that the rule in Rylands actually is two rules: a board rule of strict liability for dangerous activities or things, and a narrow rule that is essentially a sub-section of nuisance. He suggests that applying the broad rule would be advantages, both from a legal clarity view and a public policy view (largely environmental benefits from the polluter pays principle). However, he recognizes that the House of Lords in Cambridge Water and Transco has categorically rejected the board view of Rylands in favour of the narrow view, as a mere sub-section of nuisance with limited scope. Any move towards strict liability for dangerous things or activities, he noted, is now left for Parliament to decide.
The outcome of Smith v Inco, Bowal speculated, might have been affected by the “bad facts” of the case. Were the alleged losses in property valuation caused by Inco, or by the residents themselves by the very act of bringing forward a publicized suit against Inco? Were the town residents attempting to use current awareness of environmental issues to retroactively benefit from Inco’s practices decades before which were legal and of benefit to the town at the time? While this speculation might be a situation of blaming the victim, it seems that the Court of Appeal was not convinced that the participants held the moral high ground.
The rule in Rylands v Fletcher has been abandoned in Australia, and narrowed in England and Canada. Whatever form of broad strict liability it might once have been, it now has limited scope for environmental cases in either England or Canada. In England, the rule is now a ‘sub-species’ of nuisance, the elements of which include non-ordinary use of the land, and foreseeability of both the escape of the harmful thing in question, and the harm it causes. Remedies apply only for damages to property, not personal injury.
In Canada, the rule remains a tort separate from nuisance and negligence, but it has been narrowed. The SCC in Tock followed England’s lead in requiring a non-ordinary use of the land, that is, a use that is inappropriate to the time and place. In Tock, a sewer system was not deemed inappropriate use of urban land as it is a necessary component of modern urban life. In appeal court cases in Ontario (Smith v Inco) and Nova Scotia (Canada (Attorney General) v MacQueen), a nickel refinery and a steel plant and associated coke ovens, respectively, were also considered to be ordinary uses of the land. In Ontario, the court of appeal also held that the escape element of the tort must be an inadvertent escape of the substance in question. The emissions of the nickel refinery were not unexpected or unintentional ‘escapes’ of the contaminants. The court also held that while foreseeability of an escape was not required (contrary to the rule’s evolution in England), foreseeability of the type of harm suffered by the plaintiff is a required element of the tort. Leave to appeal the Smith v Inco judgment to the SCC was denied. It remains to be seen whether other provinces will follow the lead of the Ontario Court of Appeal.
Will the rule in Rylands have life in future environmental cases, distinct from negligence and nuisance? In instances of historic pollution or contamination from industrial operations, it would appear not, given the rulings in Smith v Inco Limted and Canada (Attorney General) v MacQueen. Likewise it appears not to apply in instances of damage resulting from operations described as being of general public benefit, given the SCC ruling in Tock.
The best chance for the rule in Rylands to have life in an environmental case in Canada will require a plaintiff who suffers damage from an inadvertent escape resulting from a non-ordinary use of land (something other than an established industrial operation), that is not of general benefit to the community. Furthermore, as professor Bowal alluded, a successful case will likely require a plaintiff who has the clear moral high-ground, who can definitively show harm that offends the public’s sense of justice, and for which she or he is unable to recover under nuisance or negligence. Whether such a situation exists remains to be seen, but taking anything less to court will likely be wasted effort.
 Rylands v Fletcher (1868), LR 3 HL 330.
 I refer to the jurisdiction of England in this memorandum, rather than the UK, to avoid including Scotland, the courts of which have not recognized the rule in Rylands v Fletcher as law.
 Allen M Linden & Bruce Feldthusen, Canadian Tort Law, 8th ed (Markham: LexisNexis Canada, 2006) at 545-52.
 Meinhard Doelle & Chris Tollefson, Environmental Law: Cases and Materials, 2nd ed (Toronto: Carswell, 2013) at 68.
 Mihalchuk v Ratke, 1966 SJ 43, 57 DLR (2d) 269.
 Metson v RW Dewolfe Ltd, 1980 NSJ 568, 10 CELR 109.
 Nova Scotia Power Inc v Heston Croft, 2003 NSSC 177.
 Cairns v Canadian Refining Co, 1914 OJ 426, 6 OWN 562.
 Smith v Inco, 2011 ONCA 628.
 Canada (Attorney General) v MacQueen, 2013 NSCA 143.
 Mr. Fletcher was unsuccessful against Mr. Rylands in the Exchequer of Pleas, and appealed to the Court of Exchequer of Appeals.
 Fletcher v Rylands (1866), LR 1 EX at 279-280.
 Rylands v Fletcher (1866), LR 3 HL 330 at 339.
 Cambridge Water Co v Eastern Counties Leather Plc,  2 AC 264 (UKHL).
 Transco plc v Stockport Metropolitan Borough Council,  2 AC 1 (HL), 1 All ER 589 at para 11-12.
 Rickards v. Lothian,  AC 263 at 280, 82 LJPC 42 (HC).
 Burnie Port Authority v General Jones Pty Ltd  HCA 13, 120 ALR 42 at para 18.
 Ibid at para 31, 44.
 Tock v St John’s Metropolitan Area Board, 1989 2 SCR 1181.
 Smith v Inco Limited, 2011 ONCA 628.
 Supra note 37 at para 13.
 Ellen Smith v Inco Limited, 2011 SCCA 539.
 Smith v Inco Limited, at para 68.
 A W Brian Simpson, “Legal Liability for Bursting Reservoirs: The Historical Context of Rylands v Fletcher” 1984 13 J Legal Stud 209 at 214.
 John G Fleming, The Law of Torts, 8th ed (Rozelle: Law Book Co of Australasia, 1993) at 343.
 Andrew J Waite, “Deconstructing the Rule in Rylands v. Fletcher” 2006 18 J Envtl L 423 at 425.
 John Murphy, “The merits of Rylands v Fletcher” 2004 24 Oxford J Legal Stud 643.
 Stelios Tofaris, “Rylands v. Fletcher restricted further” 2013 72 Cambridge LJ 11 at 14.
 Peter Bowal, “Environmental Class Actions for Historical Contamination: Smith v. Inco Limited” 2013 24 J Env L & Prac 295 at 311.

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