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Supreme Court will not hear legal dispute over alleged environmental contamination of Prince Albert, Saskatchewan property

April 2, 2015   by Canadian Underwriter

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A lawsuit over environmental contamination, alleged to have affected groundwater flowing towards the North Saskatchewan River in Prince Albert, will not be heard by the Supreme Court of Canada.

A lawsuit over environmental contamination, alleged to have affected groundwater flowing towards the North Saskatchewan River in Prince Albert, will not be heard by the Supreme Court of Canada.A drive-in theatre operator whose real estate sale fell through after concerns over historic environmental contamination on its land in Prince Albert, Sask. has been denied leave to appeal a lawsuit to the Supreme Court of Canada.

Strand Theatre Ltd. unsuccessfully sued the City of Prince Albert, which had operated a garbage dump, in sand and gravel pits near a drive-in theatre owned by Strand, from 1965 until 1969. Court records indicate that Strand Theatre bought the land – owned by Great West Iron Wood and Chemical Works Ltd. from 1913 until 1921 – in 1952 from the city. The drive-in theatre closed in 2004.

In 2000, Strand accepted an offer to sell the property for $325,000, but one of the conditions of the sale “was a satisfactory phase 1 environmental report,” in order to obtain financing, according to background information included in a ruling by the Saskatchewan Court of Queen’s Bench.

That decision – released in 2011 – quoted from a letter from Saskatchewan Environment and Resource Management stating the site “does not appear to be significantly contaminated for use as a commercial/industrial site, ” but with some limitations. One limitation was that no future excavations should exceed a depth of four metres, and another was that the letter “should be disclosed to any prospective buyers of the property,” wrote Mr. Justice Murray Acton of the Court of Queen’s Bench.

P. Machibroda Engineering Ltd. was the firm that originally offered to buy the property.

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After the sale fell through, Strand offered, in September, 2000, to sell the property to the city for the same price. The city declined. Two month later, Strand filed its lawsuit alleging nuisance on the part of the city. Strand also claimed the city breached section 321 of Saskatchewan’s Urban Municipality Act, which makes municipalities liable “for damages if any land or improvements are injuriously affected by the exercise of any of the powers conferred on it.”

In 2011, Justice Acton dismissed Strand Theatre’s claim, in a ruling upheld in 2014 by the Court of Appeal for Saskatchewan. In October, 2014, Strand applied for leave to appeal to the Supreme Court of Canada. The highest court announced April 2 it dismissed Strand’s application.

Located on the land were “two septic tanks, an above ground heating oil storage tank, a solid waste bin, possible PCBs from both fluorescent light ballasts and electrical transformers, and the potential presence of lead paint and asbestos containing material,” wrote Madam Justice Jacelyn Ryan-Froslie, of the Court of Appeal for Saskatchewan, of P. Machibroda Engineering’s concerns. “Off-site concerns included former landfills operated by the City, a highway which had run adjacent to the property and neighbouring land uses including a construction company, a service road, a rail line, Northern Grocers, a Public Works yard and Precision Industrial Ltd.”

A Phase 2 assessment – completed in August, 2000 on the recommendation of P. Machibroda Engineering – concluded that “off-site solid waste disposal (landfill) sites have impacted the subject property due to potential leachate migration,” Justice Ryan-Froslie noted.

In a report in 2001 – also submitted by P. Machibroda Engineering – contended that the city’s “former landfill sites had ‘…. to varying degrees, impacted the groundwater flow from the north towards the North Saskatchewan River including the groundwater …’ beneath the Strand Theatre property,” Justice Ryan-Froslie added.

But a report by AMEC Earth and Environmental Limited, commissioned by the city, “found there was ‘a great deal of uncertainty’ regarding PMEL’s results,” noted Justice Ryan-Froslie.

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Through a 2010 report from P. Machibroda Engineering, Strand Theatre “continues to assert its claim against the defendant that ‘leachates have escaped’ from the City of Prince Albert landfill and have migrated through other industrial properties to the plaintiff’s property in the groundwater,” Justice Acton wrote in 2011. “The 2010 report also alleges that immeasurable levels of constituent elements have stigmatized or created a legal nuisance that has ‘escaped’ from the plaintiff’s property. The evidence before the Court establishes that the constituent elements are in such low concentration that they fall well beneath the provincial criteria to be considered harmful contaminants and in concentrations so low that they are in some tests immeasurable.”

Justice Acton “made a number of findings of fact which were fatal to Strand Theatre’s claim in nuisance,” Justice Ryan-Froslie wrote in 2014. One finding was that “there was no evidence that leachate chemicals from the City’s landfill site #3 were migrating to Strand Theatre’s property.” Another was that “if any chemicals were migrating from the City’s decommissioned landfill site #3 they were so miniscule they did not substantially and unreasonably affect the Strand Theatre property.”

Justice Acton’s finding “are both supportable and determinative of the claim of nuisance in law,” Justice Ryan-Froslie added, in upholding the ruling dismissing Strand Theatre’s lawsuit.

The other two judges hearing Strand Theatre’s appeal – Chief Justice Robert Richards and Mr. Justice Peter Whitmore – concurred.