The Backside of a Truckstop: SCC to Rule on Balancing Competing Interests in Nuisance Cases

The Supreme Court of Canada has granted leave to appeal in Antrim Truck Centre Ltd. v. Her Majesty the Queen in Right of the Province of Ontario, a case that is expected to provide clarity about the law of nuisance, particularly in cases where the social utility of the defendant’s activity is arguably very high. The case, alongside Smith v. Inco, is one of two in which the Ontario Court of Appeal has recently dealt comprehensively with the law of nuisance. In Antrim Truck, the Ontario Court of Appeal emphasized the importance of assessing whether a substantial interference suffered by the plaintiff might nonetheless be reasonable – and therefore not compensable – when weighed against the public interest in the activity causing the interference. Although the claim at issue was one for injurious affection, the underlying actionable wrong was in nuisance and therefore raised issues of broad application.

 

Background

Ontario’s Expropriations Act allows claims for injurious affection where a property owner suffers certain losses resulting from the construction of public works carried out under statutory authority. Compensation depends in part on the cause of damage being actionable but for the statutory authority. As with many such cases that reach the courts, the public works at issue in Antrim is a highway construction project and the alleged actionable wrong was in nuisance.

The Antrim Truck Centre was a successful commercial operation that had operated for many years alongside Highway 17 west of Ottawa. Over time the Centre expanded from its original restaurant and fuel services to include various lines of business, generating gross annual revenues of over $15,000,000 and employing more than 100 people.

In 2004, a new four-lane extension of Highway 417 opened, effectively rerouting traffic away from the old Highway 17 alongside which the Centre had established its business. The new highway was built for safety reasons given that the traffic on Highway 17 had long exceeded its design capacity. The Truck Centre’s claim was that that the construction of the new highway impaired access to its property, which now required motorists to take a two kilometre detour to arrive at the Centre.

The Ontario Municipal Board (OMB) agreed that the construction was a substantial interference for which the Truck Centre deserved damages. A unanimous panel of the Divisional Court affirmed the decision.

Decision Below

Epstein J.A., writing for a unanimous panel of the Court of Appeal, overturned the Divisional Court’s decision and dismissed the claim. The Court applied a two-part test for nuisance, which considers whether the interference in the use or enjoyment of land is both substantial and unreasonable.

Substantial Interference

In determining whether an interference is “substantial”, the Court noted the need to exclude trifling forms of interference with property:

"Particularly as people live in closer proximity to each other, a certain amount, arguably an ever-increasing amount, of interference with each other’s property must be tolerated. It makes sense, therefore, that only substantial interference constitutes nuisance.

The requirement that the interference be substantial is a threshold aspect of the test. At this stage of the analysis, the court will exclude claims that disclose no actual interference as well as those in which the interference alleged is so trifling as to amount to no interference at all."

Unreasonable Interference

Four factors must be considered to determine whether the interference is “unreasonable”:

  1. 1. the severity of the interference;
  1. 2. the character of the neighbourhood;
  1. 3. the utility of the defendant’s conduct; and
  1. 4. the sensitivity of the plaintiff.

Although the Divisional Court had correctly identified these four factors in reviewing the OMB decision, the Court of Appeal found that the second and fourth factors had not been applied and that the Divisional Court failed to adequately consider the importance of the public interest in assessing the third.

Importantly, Epstein J.A. made a point of distinguishing the first factor from the first-stage consideration of whether or not the interference is “substantial”:

"At this stage, however, the purpose of the inquiry is not to determine whether the interference alleged is of a sort that warrants the recognition of the courts (the threshold test), but rather whether the interference is sufficiently severe that, when viewed alongside the other elements of the reasonableness analysis, the plaintiff should not be expected to tolerate it in the circumstances."[Emphasis added]

"Reasonableness" as the Balancing of Competing Interests

Notably, although each of the four factors was considered in turn, a considerable portion of Epstein J.A.’s judgment was devoted to how these factors together are to be assessed and understood. Specifically, Epstein J.A. emphasized that where the interference relates to the use enjoyment of property, courts must “balance the competing interests of the parties involved” as they apply the reasonableness factors.

The Court recognized that other appellate courts have rejected this approach, notably the British Columbia Court of Appeal judgment of Finch J.A. (as he then was) in Jesperson’s Brake & Muffler Ltd.:

"I see nothing in…[the authorities]… to suggest that in determining whether there has been a nuisance created, a balancing process must be gone through to determine whether the Minister’s conduct or use of land has been “unreasonable.”

Epstein J.A. noted that despite Jesperson’s, the British Columbia Court of Appeal’s recent judgment in Susan Heyes – which considered disruption caused by the construction of the Canada Line – arguably endorses a balancing process. An application for leave to appeal to the Supreme Court from Neilson J.A.’s judgment in that case was dismissed in October 2011.

The Newfoundland Court of Appeal in Airport Realty followed Jesperson’s Brake and rejected a second-stage “balancing”:

"In other words, while reasonableness is a consideration in determining whether or not the tort of private nuisance has been committed, there is no requirement that substantial interference and reasonableness be balanced, one against the other, to determine which has the greater weight. It would be ludicrous, for example, to argue against the reasonableness of the St. Lawrence Seaway in Loiselle, the overpass over the rail line in Jesperson’s Brake & Muffler or the highway realignment to an expanding airport in a growing city in Gerry’s Food Mart."

Epstein J.A. maintained that the “primary function” of nuisance is “to strike an appropriate balance between the defendant’s interest in using its property as it pleases and the plaintiff’s interest in the unfettered use and enjoyment of her land.” To do so, a court “must balance the competing interests of the parties involved” by considering the four reasonableness factors:

"In my opinion, the important principles of tolerance and accommodation necessary to sustain harmony among neighbours in an increasingly dense and complex society require a balancing of the interests of both parties to determine whether it is appropriate for the court to intervene to preserve the right of either to use their property as they wish."

Potential Significance

Observers will be interested to see how the Supreme Court approaches the Court of Appeal’s emphatic focus on the need to balance competing interests in the application of the four “reasonableness” factors, particularly given scepticism in other appellate courts about this approach. While there is no doubt that nuisance claims always involve a “balancing” of some sort, the law would benefit from greater clarity on exactly how such balancing should take place. In injurious affection cases where, by definition, the public works will always be undertaken pursuant to statutory authority, there is a high likelihood that the public interest at stake will often be a compelling one. The Court of Appeal judgment seems to suggest that where the social utility of the defendant’s conduct is very high, landowners may have to tolerate substantial interferences in their use and enjoyment of land without compensation.

The nature of the appeal may also depend on whether the Supreme Court of Canada grants leave in Smith v. Inco, the other recent Ontario Court of Appeal decision with significance for the law of nuisance. Notably, the Court of Appeal in Smith observed that the traditional approach to nuisance only allows for a “balancing of competing factors” in cases relating to amenity nuisance rather than cases involving actual damage to land. The Court suggested, however, that this may be an area where the law might evolve towards a more “uniform approach”:

"There is, however, relatively recent dicta suggesting that there may be some role for the balancing of competing factors even where the nuisance takes the form of actual physical damage to land….The difficulty that sometimes arises in distinguishing between what constitutes amenity nuisance and nuisance based on physical damage to land suggests that a uniform approach to nuisance claims allowing a court to balance competing factors, although perhaps weighing them differently depending on the nature of the interference alleged, may be preferable. We need not decide that issue. We approach this ground of appeal on the basis that the claimants are correct in contending that competing factors cannot be balanced where the nuisance involves actual physical damage to the claimants’ lands."[Emphasis added]

It is not clear whether or not the Supreme Court of Canada will likely take on a more comprehensive review of the law of nuisance in Antrim Truck. In any event, however, its decision will no doubt provide important guidance to courts about how they should view the competing interests of the parties before them in such cases and what factors they are supposed to be balancing. This will be welcome clarification given the potential for novel nuisance claims in what Epstein J.A. correctly noted is our “increasingly dense and complex society.”
Case Information

Antrim Truck Centre Ltd. v. Her Majesty the Queen in Right of the Province of Ontario, as represented by the Minister of Transportation

Supreme Court of Canada Docket: 34413

construction of public works Divisional Court injurious affection law of nuisance Ontario Court of Appeal reasonableness as the balancing of competing interests substantial interference Supreme Court of Canada unreasonable interference

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