Time to rethink neighbourhood relations

January 2009

Time to rethink neighbourhood relations

bouton-vers-francaisJasmin Lefebvre
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“Dust they are, and unto dust they shall return, yet human beings have difficulty resigning themselves to living in dust. Sometimes, weary of brooms and buckets of water, they are not unwilling to turn to the courts to get rid of it.”1

The facts

The long-awaited judgment in St. Lawrence Cement Inc. v. Barrette2 is the result of a class action instituted by a group of citizens from the city of Beauport against the owner of a cement plant who operated the plant from 1955 to 1997.
 
The recourse of the citizens, represented by the respondent Barrette, sought damages from St. Lawrence Cement Inc. (CSL) concerning the annoyances suffered due to the emission of dust, odours and noise associated with the operation of the cement plant.
 
At the time the cement plant was established on its operating site pursuant to a special statute passed by the National Assembly, many lots in the area were still vacant, although some homes had already been built on land adjacent to CSL’s property.
 
After the plant began operating, neighbourhood problems regarding CSL quickly arose. These problems led, among other things, to the repeated involvement of the Ministère de l’Environnement following complaints received by it. Moreover, in 1974, a displeased neighbour successfully instituted proceedings against CSL, arguing that the company had been negligent as regards the emission of dust. Finally, in response to certain complaints from its neighbours, CSL agreed, on specific occasions, to assume the costs of cleaning homes and automobiles that had been dirtied by dust originating from the plant.
 
During the seven years preceding the end of its operations, CSL invested over eight million dollars in the plant in order to equip it with new dust collectors so as to better control its emissions. The class action was instituted on June 4, 1993 and ultimately resulted in the judgment rendered by the Supreme Court of Canada on November 20, 2008.
 
In the trial at first instance, the appellants did all they could to prove the existence of wrongful conduct by CSL with respect to the operation of its plant, such as to give rise to its delictual liability. A wealth of evidence was presented before the Superior Court of Québec demonstrating the extent of the annoyances suffered by the neighbourhood due to the operation of the plant. However, after taking this evidence into account as well as the legal context governing CSL’s operations, the trial judge could not find that CSL had committed a civil fault giving rise to its liability under the usual rules of liability.
 
Nonetheless, the appellants’ action was allowed at first instance because the Court found CSL liable under a no-fault liability regime applicable to neighbourhood annoyances.

Legal context

Under Québec law, the general rules of civil liability are fault-based rules. Article 1457 C.C.Q. sets out the terms of these general rules:

“Article 1457: Every person has a duty to abide by the rules of conduct which lie upon him, according to the circumstances, usage or law, so as not to cause injury to another.

Where he is endowed with reason and fails in this duty, he is responsible for any injury he causes to another person by such fault and is liable to reparation for the injury, whether it be bodily, moral or material in nature. He is also liable, in certain cases, to reparation for injury caused to another by the act or fault of another person or by the act of things in his custody. ”

Within the scope of the general rules of civil liability, a person has the duty to respect the rules of conduct applicable to him according to law, usage or circumstances. In matters of civil liability, a person’s actions are examined in light of the objective criterion of the conduct of a reasonably prudent and diligent person in similar circumstances. Civil fault is the difference between the conduct of a person who is at fault and the conduct of a person who is reasonably prudent and diligent.
 
Under the general rules of civil liability, it is irrelevant whether or not there is an intent to cause harm: where a person’s conduct deviates from that of a reasonable person, the person will be at fault and will incur liability, even if he did not intend to cause harm to another. Moreover, where a civil fault exists, the nuisance resulting from the fault will not need to be “abnormal” in order for liability to arise. Mere proof that the fault caused harm will suffice.
 
In matters involving neighbourhood annoyances, a civil fault can arise from the abusive exercise of a right of ownership or the violation of a standard of conduct established by law or regulation. Abuse of rights is a case law-based doctrine which was codified in Article 7 of the Civil Code during the 1994 reform.

“Article 7: No right may be exercised with the intent of injuring another or in an excessive and unreasonable manner which is contrary to the requirements of good faith. ”

The notion of abuse of rights underscores the fact that rights are not absolute and must be exercised in light of the rights of others so as to maintain a balance. In applying the abuse of rights doctrine, the analysis, as with the general rules of civil liability, considers the defendant’s conduct in order to determine whether there has been excessive or unreasonable conduct or an intent to injure.
 
The right must be exercised in the manner a reasonable person in similar circumstances would do so; otherwise, depending on the nature of the right in question, there will be an abuse of right, which constitutes a fault. However, the exercise of a right of ownership without the intent to harm and in a manner that is not excessive or unreasonable will not be an abuse of right, even if the exercise of the right of ownership gives rise to “abnormal” annoyances.
 
As mentioned above, liability for neighbourhood annoyances can also arise from the violation of a statute. Under our system of law, however, the violation of a legislative standard is not necessarily a fault that gives rise to civil liability towards others. In order for liability to result from the violation of a statute or regulation, the violation must constitute a breach of the standards of conduct of a reasonable person in similar circumstances.
 
Evidently, the existence of a legislative standard is very useful in civil liability matters for defining the standard of conduct of a normal person in similar circumstances. Thus, these standards are relevant for the purpose of establishing whether or not a fault exists.

No-fault liability in Québec law

Given that the fault of CSL could not be proven and there was no evidence that it had exercised its rights excessively or unreasonably, could it nevertheless be held liable? The heart of the matter in the judgment rendered by the Supreme Court of Canada consisted in searching through over a century of Québec law in order to find elements pointing to the existence of a scheme of no-fault civil liability in respect of neighbourhood annoyances.
 
The Court first considered a series of judgments prior to the 1994 reform of the Civil Code where, in circumstances similar to those in the CSL judgment, the Court of Appeal and the Supreme Court of Canada had found a defendant liable for excessive annoyances suffered by its neighbours, notwithstanding the absence of any fault or abuse of rights on the part of the defendant.
 
Thereafter, the Court examined Article 976 C.C.Q. which was incorporated during the 1994 reform and reads as follows:

“Article 976: Neighbours shall suffer the normal neighbourhood annoyances that are not beyond the limit of tolerance they owe each other, according to the nature or location of their land or local custom. ”

The Court’s examination of how this legislative provision came to be and of the comments of the Legislature relating thereto led the Court to conclude that it was a codification of the prior case law which recognized no-fault liability in matters of neighbourhood annoyances. The Court noted that the emphasis in this provision was on the annoyances suffered and not on the alleged conduct of the person having caused the annoyances.
 
The Court then analyzed Québec case law subsequent to the adoption of Article 976 C.C.Q. and found that there were contradictory judgments regarding the effect of Article 976 C.C.Q. and whether or not it introduced a real no-fault liability regime in respect of neighbourhood relations.
 
However, relying on the case law and on the legislative history of Article 976 C.C.Q., the Court acknowledged the status of Article 976 C.C.Q. as an independent source of liability separate from the general rules of civil liability, with its own constituent elements.
 
According to the Court, the fact that Article 976 C.C.Q. is found in the Code in the Book on Property rather than in the Book on Obligations is a strong indication by the Legislature of its desire to dissociate the regime under Article 976 C.C.Q. from the general rules of civil liability.
 
Thus, although Article 976 C.C.Q. is drafted in the passive voice, in a manner that emphasizes the nature of the annoyances that neighbours must accept, the Court acknowledged that this provision nevertheless means that if a neighbour causes abnormal annoyances, his liability under Article 976 C.C.Q. will arise. On the contrary, in the absence of any fault whatsoever, the person who causes a “normal annoyance” will not be held liable under 976 C.C.Q.
 
Moreover, the fact that Article 976 C.C.Q. does not refer, directly or indirectly, to the wrongful nature of the conduct giving rise to the abnormal annoyances was seen as being consistent with the interpretation that causing abnormal annoyances gives rise to liability, even where there is no fault. Indeed, according to the Court, this characteristic of the right of ownership is compatible with other provisions of the Civil Code relating to the right of ownership which place the emphasis on the outcome of an act rather than on the owner’s conduct.
 
The Court emphasized that the no-fault liability regime in respect of neighbourhood relations which it was recognizing in its judgment coincided with similar systems in Canadian common law and French civil law.
 
The Court further stated that its recognition of no-fault liability in matters of neighbourhood relations was compatible with the protection of the environment, thereby constituting a further justification for the recognition of such a liability regime in Québec.
 
When reviewing the conclusions of the Superior Court, whose judgment it confirmed, the Supreme Court noted that no fault or abuse of rights had been proven with respect to CSL’s conduct. Indeed, it had been proven at first instance that CSL had satisfied its obligation to use the best means to eliminate the dust and smoke and had taken reasonable precautions to maintain its equipment in good condition and use it optimally. However, notwithstanding these observations, the Court confirmed the decision of the trial judge in respect of the abnormal nature of the annoyances suffered by the neighbours of the cement plant.
 
The Court also confirmed the interpretation of the notion of neighbour used by the trial judge, a notion that was not limited to owners of land contiguous to the defendant’s land, but also included all persons forming part of the neighbourhood affected by the abnormal annoyances.
 
Finally, the Court confirmed Madame Justice Dutil’s ruling to the effect that the special statute having resulted in the establishment of CSL in Beauport had not conferred immunity upon it against proceedings such as the one she was terminating by way of her judgment.

Conclusion

The judgment in St. Lawrence Cement Inc. v. Barrette is highly significant because it conclusively puts an end to the controversy regarding the existence of a no-fault liability regime respecting neighbourhood annoyances in Québec. This recent judgment has already been widely broadcast in the media and its clarity and impact are such that it will play a major role in years to come as regards legal relationships associated with ownership rights.
 
In our opinion, there is no doubt that this judgment exposes industrialists, more than ever, to recourses based on the harmful nature of certain aspects of their operations on their neighbourhood. With respect to neighbourhood annoyances, the fact that an analysis of the conduct having given rise to the abnormal annoyances is not a consideration makes it difficult for operators to adopt practices intended to protect against recourses based on Article 976 C.C.Q. Moreover, prior occupancy does not constitute a airtight means of defence on which the person having caused the annoyance can rely.
 
Despite all efforts taken by an operating company, the fact that a judge considers the annoyances inherent in the operation of the company to be abnormal would be sufficient to give rise to the company’s liability.
 
There is every reason to believe that the legal developments that will result from the judgment of the Supreme Court of Canada in the matter of St. Lawrence Cement Inc. will be perceived as a heavy sword of Damocles hanging over the heads of numerous owners of all types of industrial sites. Consequently, this judgment will have an impact on a slew of business decisions and strategies associated with the operation of sites likely to be the targets of a recourse based on Article 976 C.C.Q.

 

 

This bulletin provides general comments on recent developments in the law. It does not constitute and should not be viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

 

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