March 2011 – Court of Appeal Reverses Trial Court in “Canada Line” Damages For Nuisance Case

The BC Court of Appeal has reversed the trial judge’s decision, and has dismissed the plaintiff’s claim in nuisance arising out of the construction of the “Canada Line” Skytrain line in Susan Heyes Inc. (Hazel & Co.) v. South Coast BC Transportation Authority, 2011 BCCA 77 (”Heyes”). For a discussion of the trial decision, see Colin Stewart’s article in the Summer 2009 issue of LoGo.

The Court of Appeal agreed with the trial judge’s conclusion that the “cut and cover” method of construction created a nuisance, and that the plaintiff suffered significant damages as a result of that nuisance, in the form of business losses. Unlike the trial judge, however, a unanimous Court of Appeal held that the defendants were entitled to rely upon the defence of statutory authority, and therefore able to avoid liability.

The defence of statutory authority shields public authorities from liability for nuisance where there is only one practically feasible method of constructing public works and where nuisance is the inevitable result of using that method. The trial judge held that the “bored tunnel” method of construction was a “practically feasible” option despite the fact that it may have cost an additional $565 million. The trial judge’s decision on this point was consistent with the view expressed by the Supreme Court of Canada in the case of Ryan v. Victoria (City), [1999] 1 S.C.R. 201, where it was held that just because one option is considerably less expensive than the other(s) does not mean it is the only practically feasible option.

This is the point upon which the Court of Appeal’s reasoning diverges from that of the trial judge. At paragraph 125 of its reasons for judgment in Heyes, the Court of Appeal states:

“…In my respectful view, however, the common sense approach … suggests there must be some point at which a strong evidentiary record of significant financial disparity that demonstrates that one option is practically impossible, becomes a legitimate consideration in determining the practical feasibility of alternatives.”

In other words, in the Court of Appeal’s view the sheer magnitude of the additional cost involved in the “bored tunnel” method made that cost a valid consideration in deciding that the “cut and cover” method was the only practically feasible option.

The Court of Appeal also accepted that the “cut and cover” method offered additional benefits supporting the conclusion that it, and not the “bored tunnel” method, was the only practically feasible option.

Those benefits included Skytrain stations closer to the surface, and therefore more easily accessible by riders, the ability to keep some lanes of traffic along Cambie Street open throughout the construction project, as opposed to closing portions of it for the duration, and the ability to preserve the historic Cambie Heritage Boulevard. In addition, the Court of Appeal took the view that the “bored tunnel” method was not a nuisance-free alternative; rather it would simply have shifted the nuisance to other locations.

The significance of the Court of Appeal’s decision in Heyes is that it recognizes the ability of public authorities to consider more than mere technical feasibility when deciding which methods of construction are practically feasible for public works projects. Where there is a “strong evidentiary record of significant financial disparity that demonstrates one option is practically impossible”, cost is a relevant factor in deciding what is practically feasible.

As of the date of this Client Bulletin, it is unknown whether the plaintiff will seek leave to appeal to the Supreme Court of Canada. Stay tuned for further developments.