Damages for Digging

The Facts of the Case

In Heyes v. Vancouver, TransLink, Canada Rapid Line Transit Inc. and Transit B.C. Limited Partnership the defendants, TransLink, Canada Rapid Line Transit Inc. and Transit B.C. Limited Partnership were found liable in nuisance for the damages to the business operated by the plaintiff caused by the massive disruption of switching from the bore hole approach to the “cut and cover” approach in building the Skytrain (Canada Line) to the Vancouver Airport.

The plaintiff also sued the City of Vancouver, but the court found that the City, whose streets were used, was not liable because at the time the City granted a license for use of its streets for the project, the decision to use cut and cover had not actually been made public. The City was unaware that the defendants had chosen an option that was going to create an actionable nuisance.

The court dismissed additional claims based on negligence and a claim for negligent misrepresentation.

The Court’s Reason

What seems to have really bothered the court in this case was the decision to forgo boring or tunneling beneath the streets in favour of the “cut and cover” method of construction, which was made to lessen the costs that would be incurred by the contractor. However, while the defendants spared the contractor some financial outlay, they passed high financial burdens onto individual business owners that were disproportionate to the public benefit of a less expensive method of construction.

There were two methods that could be used to build the project: one method did not create a nuisance, another cost less but created a costly nuisance to adjoining businesses. In the circumstances, where the chosen method created a nuisance, the court ruled that the parties making the decision that caused the nuisance could not escape liability for the business losses resulting from the nuisance they caused.

The Law Has Changed

The important thing for local governments to note is that this case represents a significant departure from the law as it has stood until this case. In previous cases, the law had protected the public authority against claims for damages, if there was no evidence of bad faith or actual carelessness on the part of the builders of a public project. Now it is clear that public authorities cannot take this outcome for granted.

In the past, as long as the defendants made sure that access to the commercial enterprises was available, a claim for damages could not succeed. In this case, actual access was always available to the store, however customers failed to continue to frequent the business because of the excessive inconvenience and disruption.

Significance for Local Governments

There are obvious implications for local governments undertaking projects that result in long term disruption to streets, particularly where businesses are concerned. In addition to ensuring that actual physical access remains available to businesses, local government should make every effort to ensure that it considers and adopts choices that are the least disruptive to the businesses, if possible, even if it means that there may be some additional cost involved.

The longer the estimated period of disruption, the more critical it becomes to factor in the economic cost to business. If the disruption to the business in this case had been of short duration, the court ruling might have been different.