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Court File No. 12023/01

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

WILFRED ROBERT PEARSON

Plaintiff- and -

INCO LIMITED, HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO,THE CORPORATION OF THE CITY OF PORT COLBORNE,

THE REGIONAL MUNICIPALITY OF NIAGARA,THE DISTRICT SCHOOL BOARD OF NIAGARA and

THE NIAGARA CATHOLIC DISTRICT SCHOOL BOARDDefendants

Proceeding under the Class Proceedings Act, 1992

FACTUM of the DEFENDANT INCO LIMITED

(Class Certification Motion)

PART I OVERVIEW

1. For over a century, the City of Port Colborne has been home to industry.Shipbuilding, steelmaking, nickel refining and many other medium and light industries fuelled

the growth of the City. Port Colborne, like any urban area, is not the same place it was pre-

industrialization, economically, socially or environmentally. Port Colborne today is unique,

however, in that one of its industrial citizens has stepped forward and launched a comprehensive

process to scientifically assess and, if necessary, remediate its environmental legacy, a process

the City itself, the Ministry of the Environment and the Regional Public Health Department

actively support and endorse. Ironically, but not surprisingly, it is this citizen Inco and this

pathbreaking commitment the Community Based Risk Assessment or CBRA that have been

targeted and put in jeopardy by this proposed class proceeding.

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2. At any level of analysis, the claims asserted by the plaintiff are ill-suited for classtreatment and will be impossible to manage in a mass proceeding in a manner consistent with the

substantive law and procedural fairness to those involved. Certification of a few common issues

will do little to measurably advance the claims as a whole toward their ultimate resolution.

Rather than further the goal of judicial efficiency, certification will create a monster of judicial

complexity where literally hundreds of thousands of fact-intensive individual issues will have to

be adjudicated and individual residents of Port Colborne will be forced to litigate complex and

difficult-to-prove claims, at their own expense, or forever lose them. Any common issues will be

negligible in relation to the scope, magnitude and cost of the individual issues to be resolved for

each of the estimated 20,000 class members.

Health Claims

3. There is no scientific evidence at all of adverse health effects in Port Colborneattributable to nickel or any other metals in the general environment. On the contrary, Port

Colborne has been and continues to be one of the most studied communities in Canada, and

repeated health surveys have found no increased incidences of disease among Port Colborne

residents.

4. Certain forms of nickel have been associated only with particular types ofrespiratory cancer and only when inhaled regularly at extremely high workplace air

concentrations. There is no scientific evidence that nickel in any form has evercaused cancer at

anywhere near the levels found in ambient air and soils in Port Colborne. The undisputed

scientific evidence is precisely to the contrary.

5. One of the leading studies upon which Health Canadas assessment of nickel isbased followed workers at the Port Colborne nickel refinery who were continuously exposed to

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refinery dust containing the most potent form of nickel (found nowhere in Port Colborne today).

Workers exposed to this nickel dust at air concentrations 100,000 times greater than the nickel

present today in Port Colborne showed no increase in cancer rates. Only when workers at a

different part of the facility were continuously exposed to air concentrations of nickel refinery

dust over a million times greater than the nickel in ambient air in Port Colborne was any increase

in cancer rates detected.

6. The plaintiffs material, nonetheless, continuously stresses one rhetorical point:that certain nickel forms are generically classified as carcinogenic by Health Canada. In doing

so, the plaintiff purposely ignores issues of potency, concentration and exposure and their

relevance to the actual situation in Port Colborne and the claims asserted in this action.

7. One of the worlds foremost experts in nickel toxicology (and an independentpeer reviewer of the MOEs most comprehensive report to date regarding Port Colborne), Dr.

Tor Norseth, believes that there is no risk of respiratory cancer at all from airborne nickel to

anyone in Port Colborne. The plaintiffs risk assessor nevertheless calculates (by using a

disputed extrapolation model without analysis of the toxicological evidence) that cancer risks for

some residents could be in the range of about 40 in a million. By contrast, Dr. George Becking,

formerly Health Canadas chief of environmental and occupational toxicology, is in substantial

agreement with Dr. Norseth and believes that any cancer risks from nickel in Port Colborne, if

they exist at all, are less than 1 in one million.

8. With regard to soil nickel levels, there is no scientific association at all betweenthe ingestion of nickel in the soil and cancer. In fact, reports of any health effects resulting from

the ingestion of nickel are extremely rare and relate to exposures on a scale massively higher

than possible in Port Colborne. Nickel is ubiquitous in ordinary foods, and one ingests much

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more nickel in a day from eating a small hamburger and french fries than from being daily

exposed to the highest level of nickel ever found on a Port Colborne property.

9. Devoting a proceeding to adjudicating such very low risks neither is a usefulexercise nor resolves a common issue. Each individuals actual risk, if it exists at all, is unique

and dependent upon a myriad of individual factors of exposure, lifestyle, family history, time in

the community, work conditions, smoking history, etc. The plaintiffs own risk assessment

expert has conceded the enormity and individuality of assessing individual class members

differing level of risk:

[T]he risk assessment methods practiced by Dr. Becking and myself cannot be

used to deduce, in any way, the risk that an individual may experience . . . . There

is significant variability in individual susceptibility to toxic effects of chemical

exposures, due to factors such as age, diet, pre-existing health conditions,

genetics, prior exposures and innumerable other factors. These factors, and the

variability in toxic response that they engender, preclude any validity in even the

most rudimentary projection of risk for individuals.1

10. Moreover, attempting to litigate the varying individual levels of low risk woulddo nothing to advance the health claims asserted in this action. Determining whether the

presence of environmental metals attributable to Inco actually caused the numerous maladies

alleged by the plaintiff is the central, necessary ingredient for any tort liability for such maladies.

Proving medical causation is always individualized, but it is especially individualized where, as

here, the alleged health effects are of the widest dimension, with multiple common causes, and

the argued levels of risk range from extremely low to non-existent. As Dr. Becking has pointed

out, and as the plaintiffs risk assessor apparently agrees, one cannot infer causality on an

individual basis without a thorough assessment of the individual in question; that is, his/her

1 Supplementary Affidavit of Dr. Mark Richardson, Ex. A; Plaintiffs Supplementary Record, tab 3A, pp. 20-21

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symptoms, personal and family medical history, lifestyle, diet, occupation and other

individualized factors, including a detailed exposure assessment. This is particularly important

when the estimated risk from the alleged causal agent is low, and the disease is known to occur

independently of the chemical.2

Other Claims

11. The same sort of highly individualized undertaking will have to be repeated againand again with respect to numerous issues and each class members claim. Even determining the

existence, extent and source of metal content in the soil will require detailed property-by-

property sampling and analysis. Studies of environmental conditions across Port Colborne to

date have shown that soil conditions and content are highly variable and property-specific

among the properties already sampled (a fraction of the total number of properties), many have

typical or near-typical levels of most or all metals and where levels are elevated they differ

widely from property to property and metal to metal. Certain metals, like lead, are commonly

found in older urban soils due to common domestic use of lead-based paints and other products.

Lead levels measured in Port Colborne are typical of older urban areas, and there is no scientific

evidence linking them to Incos operations. Arsenic was a significant by-product of another

long-time industry in town.

12. The expert evidence is also uncontroverted that the existence and extent ofresidential property value impacts can only be determined through a case-by-case assessment

that takes into account the timing of individual purchase and sales, the knowledge of the

homebuyer at the time of purchase or sale and the numerous attributes that affect the value of a

2 Dr. George Becking, Review of Health Risks from Various Chemicals in Port Colborne (Becking Report), p.21; Inco Record, Vol. III, tab 2B, p. 1223

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home the homes size, age, configuration, condition and lot, local crime rates, proximity to

highways, parks, employment and shopping, etc. Determining the cause of alleged settlement

damage to homes is similarly a highly home-specific and location-specific inquiry. The expert

evidence is also unchallenged that allegations of crop impacts and their cause can only be

assessed on a year-by-year, field-by-field and crop-by-crop basis that accounts for numerous

individual variables and individual farmers crop management practices.

13. The evidence to date also reveals that numerous individualized defences ofsubstance will have to be litigated on a class member by class member basis. Rather than

consolidate litigation, certification will generate individual litigation of a massive dimension.

Preferable Procedure

14. By contrast, the CBRA process initiated well prior to this lawsuit is uniquelysuited to comprehensively and efficiently address environmental concerns related to the presence

of nickel, copper, cobalt and arsenic in Port Colborne area soils. Funded by Inco at a cost that

will exceed $5 million, the CBRA will conduct and utilize the results of numerous scientific

studies designed to assess any human health and ecological risks that may be present in Port

Colborne due to nickel, copper, cobalt and arsenic. Utilizing conservative principles of risk

assessment, the CBRA will sample property in Port Colborne and offer suitable remediation paid

for by Inco, if and where called for, depending on individual property characteristics.

15. Although elevated levels of those metals attributable to the Inco facility stemalmost entirely from industrial activity in a bygone era (97% or more came from pre-1960

operations), in order to benefit from the CBRA process current residents of Port Colborne (i) do

not have to establish legal liability and overcome legal defences; (ii) do not have to show that all

or most of the chemicals of concern found on their property originated with Inco; (iii) do not

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have to show any harm or damage has actually been caused to them; (iv) do not have to show

that the CBRA model meets judicial standards of proof. Instead, necessary remediation will be

offered on a no-questions-asked basis based on the results of the comprehensive scientific model

and individual property characteristics.

16. The end result of the CBRA will be not only that individual properties areapproved and safe for development and use but also that Port Colborne as a whole is recognized

as a healthy place to live, with all of its lands safe for productive use. The unrebutted expert

evidence, drawing on research from the United States, is that such community-wide remediation

efforts are very effective in eliminating property value impacts, if any, that may have arisen from

environmental contamination or publicity surrounding it. Furthermore, in conjunction with the

CBRA, comprehensive health and property value studies are being conducted in order to

ascertain whether any lasting impacts exist from the facilitys historic operation.

17. Furthermore, the CBRA process does not stand alone. Complementing theprocess is the active involvement of the Ministry of the Environment which has fully engaged its

regulatory processes in Port Colborne. The MOE has gone beyond the CBRA where it feels

circumstances warrant, as in the Rodney Street area.

18. In short, a class proceeding is not a preferable procedure in this case. Indeed, theactivities of class counsel have already slowed down and encumbered the CBRA process, related

health studies and the MOEs and Incos efforts to remediate homes in the Rodney Street area.

Furthermore, class certification of this matter has the potential to undermine the consent,

cooperation and consistency that have allowed the CBRA process to take place. Litigation-

driven environmental assessment and remediation is not what is best for Port Colborne, for the

future of the CBRA or for the possibility of similar processes elsewhere. The CBRA is the first

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such industry-funded comprehensive community risk assessment and risk management process

that Canada has seen. Depending on the message sent by this proceeding, it could be the last.

PART II THE FACTS

A. Incos Port Colborne Facility

1. Background

19. Incos Port Colborne facility was designed and constructed during World War I inresponse to wartime demand for nickel and political pressure for the development of a domestic

nickel refining capacity. The facility opened in 1918 and, by contemporary accounts, was a

state-of-the-art refinery for nickel and other metals.3

20. The facility has undergone significant process, operational, technological andequipment changes over its history. For example, originally the Orford process was carried

out at the facility to treat raw nickel-copper matte for further refining but the process was

transferred elsewhere in the 1930s. Copper processing ceased around this time as well. In the

mid-1920s, electro-refining operations were introduced and, over time, became the primary

means of producing refined nickel. Various other operating changes characterized different

periods of the plants history, including changes in dust control equipment which accompanied

technological advancements and the implementation of modern occupational standards for

workplace conditions. Originally designed to produce about 15 million pounds of nickel a year,

the plant underwent various expansions and by the end of its half-century operational life (for

nickel production) had produced over 7 billion pounds of electrolytic nickel.4

3 Affidavit of Dr. Bruce Conard, paras. 4-5, 10 (a) and Exs. B & D; Responding Record of Inco Limited (IncoRecord), Vol. I, tab 1, pp. 4-6, 87-88, 94-102

4 Affidavit of Dr. Bruce Conard, paras. 7-9, 11-13; Inco Record, Vol. I, pp. 5-8

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21. Nickel production peaked in the middle decades of the last century at which timethe facility employed close to 3,000 people. For many years, the facility was apparently the

largest employer in Port Colborne. Production, however, declined in the 1970s, and in 1984

electrolytic nickel production stopped altogether. Other operations continued at the facility but

at a significantly reduced scale. Currently, the facility carries out some cobalt and precious

metal refining and the warehousing of products from other operations. It now employs about

190 people.5

22. Port Colborne and the Welland Canal region has been and continues to be thehome to various other industrial works, including a large iron smelter / steel plant operated by

the Canadian Furnace Company (later Algoma Steel) from 1917 to 1977 which was located only

a few hundred meters upwind of the Inco facility and was known to emit arsenic, among many

other chemicals. Various medium to light industries and activities associated with shipping

traffic through the canal were also prevalent and impacted the local areas in which they were

situated. For example, studies of lands now owned by Transport Canada near the Inco site and

the adjoining Rodney Street neighbourhood show significant impacts caused by, among other

things, an old CN railyard, a scrap metal yard and the Algoma plant in the vicinity. Areas of Port

Colborne also demonstrate impacts typical of older urban areas in which the local use and

disposal of lead-based household products was once commonplace.6

MOE Soil Investigation and Human Health Risk Assessment for the Rodney Street Community, PortColborne: March 2002 (MOE March 2002 Report), Part A, pp. 2-3; Motion Record of Her Majesty the Queenin Right of Ontario (Crown Record), Vol. III, tab F

5 Affidavit of Dr. Bruce Conard, paras. 8-9; Inco Record, Vol. I, tab 1, pp. 5-6

Affidavit of Wolfgang Kaufmann, para. 10; Plaintiffs Record, Vol. I, tab 3, p. 10

6 Affidavit of Dr. Bruce Conard, paras. 23-24, 30 and Ex. H; Inco Record, Vol. I, tab 1, pp. 12-13, 15, Vol. II, tabH, pp. 443-46

MOE March 2002 Report, Part A, pp. 37-38; Crown Record, Vol. III, tab F

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2. Historic Emissions from the Inco Facility

23. The makeup and quantity of particulate emissions from Incos facility varied overthe years with changes in processes, operations and technology and as a function of production

volumes. Historically, emissions were highest in nickel, although the forms of nickel including

nickel subsulfide, nickel carbonates, nickel hydroxides, nickel oxide, nickel sulfate and nickel

metal and their mixture varied widely over time. Lesser amounts of copper, cobalt, arsenic and

other compounds were also emitted especially in the earlier years of operation.7

24. While exact measurements of total emissions from the facility are not available, itis widely agreed that the vast bulk of emissions were associated with operations prior to 1960

before decreases in production volumes and modern advances in emission control technology.

The plaintiff has presented older evidence estimating that 95% or more of the total nickel emitted

from the facility was emitted before 1960. More comprehensive analysis undertaken as part of

the CBRA in 2001, and accepted by the MOE, breaks down total nickel emissions from six

different operating periods and indicates that over 97% of the total nickel emissions deposited in

the surrounding area occurred before 1960. By comparison, emissions since 1984 have been

negligible and have not measurably impacted the chemical composition of surrounding lands.8

25. It is also not disputed that since the establishment of the Ministry of theEnvironment, Inco has been scrupulous both in terms of compliance with environmental

standards and regulation and voluntary abatement measures which the MOE regularly was

7 Affidavit of Dr. Bruce Conard, paras. 15-16, 37; Inco Record, Vol. I, tab 1, pp. 9, 17


MOE March 2002 Report, Part A, p.3 and Figure 1; Crown Record, Vol. III, tab F

Affidavit of Allen Baldwin, Ex. D; Plantiffs Record, tab 7D, pp. 255-61

Affidavit of Dave McLaughlin, paras. 29-32; Crown Record, Vol. I, tab 1, p. 9

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pushing. One of the plaintiffs own witnesses a former long-time employee of the MOE

assigned to monitor Incos facility in the 1970s and 80s testified unequivocally that Inco

actively pursued voluntary abatement efforts, never installed anything in its facility without a

proper regulatory approval, never failed to install anything which had been approved and never

violated any conditions of approval. He emphasized: International Nickel, when they applied

for certificates of approval, put in the equipment as per the application. That was my experience

with that company. Whatever they put down on their application, they in fact held to that.9

3. Public Awareness in Port Colborne

26. The issue of emissions from Incos facility is an old and very public one.According to the plaintiffs evidence: Historically, the presence of Inco and its impact on the

City of Port Colborne has been well known throughout the community. In fact, complaints

about Incos stack appeared in the press as early as 1938. While injury to vegetation steadily

declined since 1960 and observed vegetation damage virtually disappeared by 1980, elevated

levels of residual nickel in area soils have been reported for at least 40 years. In the 1960s, the

Humberstone Township Council passed a resolution, reported in the press, regarding

environmental concerns.10

27. Since the early 1970s, the MOE has openly and regularly taken air and soilsamples in the vicinity of the facility, typically on the property of, and with the permission of,

local landowners. In 1981, the federal government commissioned a health study in which 1,000

homes were approached and over 300 residents participated. The study looked at, among other

9 Cross-Examination of Allen Baldwin, pp. 5-8 esp. q. 17-18 (Inco asked for and received approval to installwater treatment facility which proved very effective), pp. 12-18, 25-26 q. 98, 28

10 Affidavit of Wolfgang Kaufmann, para. 10; Plaintiffs Record, Vol. I, tab 3, p. 26

Affidavit of Dr. Bruce Conard, paras. 71-73; Inco Record, Vol. I, tab 1, pp. 28-29

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things, known health effects of nickel and found that Port Colborne residents are generally

healthy with no illnesses reaching abnormal levels.11

28. In 1992, awareness of environmental issues in the Rodney Street area adjoiningthe facility was such that area residents cited it when an application for rezoning for a residential

development came up for approval. According to minutes kept by the City, the plaintiff himself

participated in the discussions.12

29. Many Port Colborne residents are also current or former Inco employees whoworked at the facility, possessing whatever special knowledge of the facility and its operations

they acquired on the job. Other residents would have been exposed to the Inco facility through

their jobs. The plaintiff himself worked for a time in a job for a metal company that took him

inside the facility.13

B. The Port Colborne Environment Today

1. Port Colborne Generally

30. Various soil investigations over the years have detected elevated levels of nickelin surface soils generally in a northeastern direction from the Inco facility, the direction of the

prevailing wind. Because the Inco facility is located in the southeastern section of residential

Port Colborne, most of the area with elevated levels of nickel lies outside the residential portion


12 Cross-Examination of Charles Miller, p. 26

Joint Compendium of Exhibits and Answers to Undertakings, Vol. II, tab G(3)

13 Affidavit of Wolfgang Kaufmann, para. 10; Plaintiffs Record, Vol. I, tab 3, p. 26

Affidavit of Dr. Bruce Conard, para. 8; Inco Record, Vol. I, tab 1, p. 5

Cross-Examination of Wilfred Pearson, pp. 44-45

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of the City. Inco has acknowledged that historic airborne emissions from its facility

predominantly prior to 1960 are the primary source of nickel in area surface soils. To a much

lesser extent, elevated levels of copper, cobalt and arsenic have been detected intermittently in

surface soils, of which copper and cobalt can be attributed predominantly, and arsenic partially,

to early operations at the Inco facility.14

31. In 1999, the MOE undertook a study designed to augment earlier samplings ofthese substances in Port Colborne area surface soils. The study included a computer mapping

that approximated, from the samples collected, an area of about 28.6 square kilometers in which

nickel levels exceed the MOEs Table A generic guideline for nickel, a much smaller area of

about 0.8 square kilometers containing excess cobalt, an even smaller area of about 0.2 square

kilometers containing excess copper and no mapable area at all containing excess arsenic, lead or

zinc that could be spatially related to the Inco facility. The study warned that these maps should

only be used as an interpretative tool to provide information on approximate areas and/or

patterns of contamination and cannot be used to infer contaminant concentrations at locations not

directly sampled.15

32. Ambient air levels of nickel have been steadily declining since nickel refiningceased in 1984. Recent measurements of nickel in the ambient air (collected in the Rodney

Street area in the summer of 2001, when levels would be expected to be highest) showed air

nickel at levels of about one-third of a decade ago. This level is about 200 times lower than the

MOEs 24-hour air standard for nickel. Furthermore, these summer-only levels are in the same

concentration range as year-around measurements from other urban areas across Southern

14 Affidavit of Dr. Bruce Conard, para. 17; Inco Record, Vol. I, tab 1, p. 10


15 Affidavit of Dr. Bruce Conard, paras. 19-20 and Ex. E; Inco Record, Vol. I, tab 1, pp. 10-11, 114

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Ontario, with Windsor and Toronto showing long-term mean values 70% of the summer mean

readings in the Rodney Street area and Ottawa showing maximum readings that exceed by

almost 40% the maximum reading from Port Colborne. More generally, according to the MOE,

the levels of the metals of concern found during the recent [air] monitoring program by the

MOE are comparable to those in other parts of the province. A high percentage of nickel in the

air throughout the industrial world arises from the ordinary combustion of fossil fuels, such as

vehicle engine exhaust and coal and oil burning power generation facilities.16

2. The Rodney Street Area

33. The Rodney Street area is a neighbourhood sandwiched between Incos facility,the former site of Algomas steel plant and the Welland Canal. It is an area that has been

surrounded by heavy industry for a century or more. It is near Lake Erie and the ground is

comprised of a substantial amount of fill, including slag from various industrial operations as

well as peat and clay. Soil conditions are very different from elsewhere in Port Colborne.

Homes in the area are modest and low-valued. The plaintiff, who resides on Rodney Street,

purchased his home in 1980 for $17,000.17

16 Affidavit of Dr. Bruce Conard, paras. 69, 89; Inco Record, Vol. I, tab 1, pp. 28, 34

Supplementary Affidavit of Dr. Bruce Conard, para. 3; Inco Record, Vol. IV, tab 6, p. 1294

Supplementary Affidavit of Dr. George Becking, paras. 9, 13; Inco Record, Vol. IV, tab 7, pp. 1305-06, 1308

MOE March 2002 Report, Part B, p. 24 and Appendix 1, p. 2; Crown Record, Vol. III, tab F

US EPA: Locating and Estimating Air Emissions from Sources of Nickel; Inco Record, Vol. I, tab F,pp. 177-362


Affidavit of Bill Berkhout, para. 9; Plaintiffs Supplementary Record, tab 5, p. 97

Cross-Examination of Wilfred Pearson, pp. 13-14 q. 37

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34. The Rodney Street area became a focus of attention in September 2000 when itwas announced that the MOE had found higher than expected nickel levels in a soil sample taken

from a single property in the area. Prior to September 2000, elevated nickel levels were well

known and documented from decades of soil investigations but the highest previously observed

level was 9,750 mg/kg (parts per million or ppm) whereas a detected level of 14,000 ppm was

announced in September 2000. This led the MOE to conduct a widespread sampling campaign

of all residential properties in the Rodney Street Area, in which more than 1,500 soil samples

were collected, and to carry out a detailed human health risk assessment for that community.18

35. While the comprehensive soil results showed an average soil-nickel concentrationof 2,500 ppm, well within (and at the low end of) the expected range for such an area

immediately adjacent to the Inco facility, a single highest concentration of 17,000 ppm was

found in one sample taken from beneath the surface. Nevertheless, the testing as a whole

showed that such very high soil nickel levels are not wide-spread throughout the community.

Also, unlike elsewhere in Port Colborne, higher levels of nickel, where detected, were typically

found at depth (as opposed to in the surface soils) along with significant amounts of slag and

other non-native landfill suggesting a non-Inco origin for some of the contamination. Overall,

the sampling study found that soil contamination in the Rodney Street community, although

extensive for some elements, tends to be patchy. Properties with much lower soil contamination


Affidavit of Wolfgang Kaufmann, para. 38; Plaintiffs Record, Vol. I, tab 3, p. 35

Affidavit of Ellen Smith, paras. 3-4; Plaintiffs Supplementary Record, tab 6, p. 102

Cross-Examination of Wolfgang Kaufmann, pp. 6-7

Cross-Examination of Wilfred Pearson, p. 50

Cross-Examination of Ellen Smith, p. 11


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levels were often encountered between properties with much higher concentrations. Conversely,

occasionally single properties with significantly elevated concentrations of some elements were

surrounded by properties with much lower contaminant levels.19

36. The plaintiffs factum, in paragraph 4, misleadingly states that the level ofcontamination near the Inco Refinery is 5,588 ppm. In fact, this figure represents the 90th

percentile of nickel readings collected by the MOE in the Rodney Street area. Most samples

showed far lower nickel levels. Most importantly, this obscures that there is great variability in

metal levels from property to property.

37. The MOEs Rodney Street report recommended that 25 properties (out of severalhundred in the area tested), in which even one sample showed nickel levels of greater than 8,000

ppm, be remediated. Although Inco strongly disagreed with some of the conclusions of the

report (and has appealed them through the regulatory process), Inco immediately volunteered to

remediate the 25 properties identified by the MOE just as it had done in the spring of 2001 when

an earlier version of the report recommended 16 properties for remediation. Remediation of five

of these 25 properties has already taken place. Remediation of the others, however, has been

blocked by plaintiffs counsel who has been personally retained by some area residents.20

C. The Plaintiffs Claims


MOE March 2002 Report, Part A, pp. 14, 22; Crown Record, Vol. III, tab F


Affidavit of Kal Haniff, paras. 21-38; Crown Record, Vol. IV, tab 3

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38. This proceeding was launched in late March 2001, several years after the CBRAwas first proposed and just a few days before the MOE issued its original draft report concerning

the Rodney Street area.

39. The central allegation made by the plaintiff is that [s]ince it began operation, [thePort Colborne facility] has continuously emitted toxic, noxious, dangerous and hazardous

substances into the natural environment. As a result, the plaintiff claims, contaminants can

now be found throughout the lands owned, occupied or used by Class members. The plaintiff

alleges that these emissions have caused and continue to cause (i) extensive, severe and

widespread damage to property and to the value of property owned by Class Members; and (ii)

extensive, severe and widespread damage to the physical and emotional health and well being

of Class Members.21

40. The alleged losses to property include loss of use and enjoyment of property . . .including extensive business and personal losses; and loss of value of property . . . including the

complete devaluation of certain properties, and loss of the ability to sell, finance or mortgage

numerous properties. The alleged health effects include an extensive list of respiratory,

cardiovascular, dermal, developmental, carcinogenic, hematological, renal, hepatic, reproductive,

immunological and neurological conditions and diseases, ranging from cardiac arrhythmias,

headaches and high blood pressure to anaemia and gout.22

21 Fresh As Amended Statement of Claim (Statement of Claim), paras. 14-17; Plaintiffs Record, Vol. II, tab1A, pp. 12-13

22 Statement of Claim, paras. 24-25; Plaintiffs Record, Vol. II, tab 1A pp. 15-16

Reply to Demand for Particulars, para. 5; Plaintiffs Record, Vol. II, tab 1B, pp. 34-42

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41. The plaintiff has also alleged that water pumping activities undertaken at thefacility to control migration of contaminants have caused local subsidence damage to the homes

in the area.23

42. The primary cause of action alleged against Inco is nuisance for allegedinterference with Class Members use and enjoyment of their lands and premises. In addition,

the plaintiff claims strict liability under the doctrine of Rylands v. Fletcher, trespass and

negligence.24

43. The proposed class is defined geographically by the boundaries of themunicipality of Port Colborne. As can be seen from the map at page 91 of Incos Record, the

residential portion of Port Colborne represents only a small portion of the municipality. Thus

included within the proposed class are not only urban residents and businesses but also a

substantial number of potential agricultural claimants. The boundaries of the municipality or the

residential sections of Port Colborne also do not bear any necessary relationship to the emergent

patterns of elevated soil metal levels. For example, MOE soil testing shows very little or no

elevation of soil metal levels on properties in the western section of Port Colborne.25

D. Expert Evidence the Individualized Process Required to Determine Causation and

Other Factual Elements of the Claims

44. The nature of the evidential inquiry necessitated by the claims in this case in lightof the scientific and historic realities in Port Colborne was the subject of extensive, and

23 Statement of Claim, para. 18; Plaintiffs Record, Vol. II, tab 1A, pp. 13-14

Reply to Demand for Particulars, para. 9; Plaintiffs Record, Vol. II, tab 1B, pp. 43

24 Statement of Claim, paras. 27-32; Plaintiffs Record, Vol. II, tab 1A, pp. 17-19

25 Port Colborne area maps; Inco Record, Vol. I, tab 1C, pp. 90-92

Affidavit of Wolfgang Kaufmann, paras. 2, 44-53; Plaintiffs Record, Vol. I, tab 3, pp. 24, 36-41

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uncontroverted, expert testimony. (As discussed further below, the plaintiff adduced virtually no

evidence as to the process required to determine the claims in this case, and the plaintiffs factum

discusses quite selectively and misleadingly evidence that predominantly goes to the merits

of the claims instead of the nature of the process required for determining them.) The record is

clear that determining the nature, scope and source of actual soil conditions on different

properties, evaluating health exposures and consequences and attributing their cause,

ascertaining the existence, cause and nature of property value changes, assessing the reason for

and nature of crop impacts, and determining the cause and nature of subsidence damage to

homes are all undertakings that can only be carried out on a highly individualized property-by-

property and person-by-person basis. The expert evidence demonstrates that in the context of the

entire claim there is an overwhelming amount of individual factual questions and issues that

would have to be determined for each of 20,000 class members. As discussed below, such

individual issues would be left to individual class members to litigate at their own expense.

1. Determining Soil Conditions and Their Source

45. The current soil situation on any piece of property critical to issues ofindividual exposure is unique due to the effects of changing use, soil conditions, erosion,

excavation, wind breaks, tree cover, landscaping, natural chemical processes and other factors.

The bulk of Inco-related depositions occurred 40-80 years ago. With respect to nickel alone, the

MOEs soil testing has found considerable variability in soil Ni concentrations vs. distance from

the refinery. Soil Ni concentrations at some sites are relatively low compared to other sites

located at similar or greater distances from INCO. Contaminant concentrations cannot be

inferred at locations not directly sampled. As discussed further below, contaminant

1999 MOE Phytotoxicology Soil Investigation, pp. 63-71; Inco Record, Vol. I, tab 1E, pp. 167-75

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concentration is a crucial factor in assessing actual individual human exposure and health

consequences, as well as crop and other phytotoxic impacts.26

46. Furthermore, various alleged contaminants such as lead, arsenic and zinc cannot be automatically attributed to Inco. They have not been generally observed in quantities

or patterns suggesting Inco as the sole or predominant source and there are known to be

alternative or additional sources for them. At a minimum, extensive further individual analysis

would have to be undertaken to attempt to show that Inco was the source of elevated levels of

lead, arsenic or zinc measured on any individual property. Such analysis would, in the case of

lead for example, have to rule out lead-based paint, lead-acid car battery usage and disposal and

leaded gasoline as the cause of any elevated measurement on a particular property.27

47. In addition, nickel and other chemicals in the soil can and do take many differentforms, with different and significant implications for health. This is particularly the case with

respect to chemicals historically emitted from Incos facility in Port Colborne. They have been

exposed to disparate environmental conditions for a half century or more and have reacted and

combined with other soil chemicals in numerous ways and to different extents. Soil chemists

have advised that under normal soil conditions (rainfall, snowfall, availability of oxygen)

deposited particles would react over time with the water phase and adjacent soil minerals to form

new compounds that would have different chemistries than the originally deposited particles.

Understanding the forms of metal present on a particular property is a prerequisite to assessing

health and ecological consequences. As the Agency for Toxic Substances and Disease Registry

(relied on by the plaintiff) advises in its comprehensive assessment of the toxicology of nickel:

26 Affidavit of Dr. Bruce Conard, para. 18 and Ex. E; Inco Record, Vol. I, tabs 1 and 1E, pp. 10, 114, 116

27 Affidavit of Dr. Bruce Conard, paras. 20-24 and Ex. E; Inco Record, Vol. I, tabs 1 and 1E, pp. 11-13, 115-16

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The speciation and physicochemical state of nickel is important in

considering its behavior in the environment and availability to biota. For

example, the nickel incorporated in some mineral lattices may be inert and

have no ecological significance. Most analytical methods for nickel do

not distinguish the form of nickel; the total amount of nickel is reported,

but the nature of the nickel compounds and whether they are adsorbed to

other material is not known. This information, which is critical in

determining nickels liability and availability, is site specific. Therefore, it

is impossible to predict nickels environmental behavior on a general

basis.

* * *

Nickel is strongly adsorbed by the soil, although to a lesser degree than

lead, copper, and zinc. There are many adsorbing species in soil, and

many factors affect the extent to which nickel is adsorbed, so the

adsorption of nickel by soil is site specific. . . . (emphasis added)

Other leading research, as well as the MOE, likewise recognize that, in assessing health

effects of nickel, speciation is of paramount importance.28

48. Actual speciation testing has confirmed the variability and site specificity of thenickel forms in Port Colborne soils. Whereas, in the Rodney Street area, soil nickel has been

found mostly in the form of nickel oxide, testing of samples from elsewhere in Port Colborne

show widely differing forms of nickel with different species predominating from site to site. (As

discussed below, claims in the plaintiffs factum that testing has shown a predominance of nickel

oxide across Port Colborne are demonstrably false.) As part of the CBRA process, described

further below, a variety of speciation techniques are being used and weighed to arrive at

March 2002 MOE Report, Part A, pp. 38-40; Crown Record, Vol. II, tab F


ATSDR: Toxicological Profile for Nickel (1997), pp. 172, 181; Inco Record, Vol. II, tab 1I, pp. 865, 874

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conclusions for individual soil samples from different properties that will be taken as part of the

process.29

2. Determining Health Effects and Their Cause

49. Determining whether individuals suffer alleged health effects, and whether anysuch effects were actually caused by particular environmental conditions, is an inherently

individualized undertaking even if environmental conditions were not as variable and site

specific as they are in Port Colborne. Determining causation is especially individualized when

the estimated risk from the alleged causal agent is low, and the disease is known to occur

independently of the chemical.30

50. Even determining the mere risk, if any, a person faces is an individualized inquiryof significant scope. To draw conclusions about any homeowners level of risk from the

environmental condition of his or her property in Port Colborne, individual exposure data is

crucial actual exposure is function of not only the level of chemicals on that persons property,

but also the persons food and water consumption patterns (e.g. one consumes far more nickel

from a small hamburger and fries than one is likely to ingest from daily exposure to the highest

levels of nickel in the soil on Rodney Street), behaviour, lifestyle, etc., throughout the persons

lifetime.31


Supplementary Affidavit of Dr. Bruce Conard, paras. 5-10; Inco Record, Vol. 4, tab 6, pp. 1295-98

30 Becking Report, p. 21; Inco Record, Vol. III, tab 2B, p. 1223

31 Becking Report, pp. 19-20; Inco Record, Vol. III, tab 2B, pp. 1221-22

Mark Richardson, Assessment re Arsenic Contamination in Wawa, p. 31; Joint Compendium of Exhibits andAnswers to Undertakings, Vol. II, tab J(2)

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51. Risk assessments of the type the MOE conducted for Rodney Street do not useindividualized data to estimate risk. Risk assessments are instruments of policy which make

across-the-board and conservative as opposed to individualized and most plausible

assumptions about population groups in order to assist policy-makers. The predictions of risk

assessment and actual levels of risk are not the same thing and risk assessment is designed to

err, where uncertainties exist, on the side of overestimation. For example, in the MOEs Rodney

Street risk assessment, it was assumed that all residents were continuously exposed to soil with

17,000 ppm nickel even though average soil nickel levels are 2,500 ppm and only one sample out

of 1,500 showed 17,000 ppm nickel and that sample was taken from subsurface soil. As put by

the risk assessor retained by the plaintiff, the estimations of risk assessment are no longer

theoretically applicable to estimating an individuals risk because there are no data relating to

any individuals behaviour, food consumption patterns, etc. throughout his/her life. The U.S.

Environmental Protection Agency has similarly warned that risk assessment techniques cannot

be validly used to accurately predict the incidence of human disease or the type of effects that

chemical exposures have on humans.32

52. Even when the conservative and non-individualized conventions of riskassessment are used, the calculated risks to residents of Port Colborne are extremely low or non-

existent from metals in the soil. This is the thrust of the MOEs Rodney Street study, although as

a precautionary measure the study recommends remediation of properties with greater than 8,000

ppm nickel. [Inco is appealing the MOEs order in this regard although it is voluntarily

32 Becking Report, pp. 16-17, 20; Inco Record, Vol. III, tab 2B, pp. 1218-19, 1222

Mark Richardson, Assessment re Arsenic Contamination in Wawa, pp. 31-32; Joint Compendium of Exhibitsand Answers to Undertakings, Vol. II, tab J(2)

Supplementary Affidavit of Dr. Bruce Conard, para. 12; Inco Record, Vol. IV, tab 6, p. 1299

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carrying out the remediation because, in the opinion of Dr. Becking, the level of precaution

employed was undue and unsound as a matter of principled risk assessment. The

recommendation was based on a small estimated exceedence of the nickel reference dose or

RfD for a single age group. Yet by definition, exposures in excess of the RfD are only

potentially significant if they can occur over a lifetime (except for massive acute exposures many

orders of magnitude greater than possible in Port Colborne). The very conservatively estimated

lifetime nickel exposure for Rodney Street residents is, in fact, less than one-half the nickel RfD,

and residents are in fact exposed to more nickel from their ordinary diets than from the soil. In

any event, as the plaintiffs risk assessor has pointed out elsewhere: an RfD is not a benchmark

for distinguishing health from disease, but has been derived as a conservative reference value

that is, with reasonable certainty, free of ill effects.]33

53. One of the peer reviewers for the MOE report was Tor Norseth, M.D., PhD, ofNational Institute of Occupational Health in Norway. Dr. Norseth is one of the worlds foremost

experts in nickel toxicology. After a detailed review of the MOEs work on Rodney Street, Dr.

Norseth concluded: There is for all practical purposes no increased health risk caused by the

soil nickel contamination in the Rodney Street area.34

54. The plaintiff, by contrast, has not presented any evidence of increased health riskin Port Colborne. The risk assessor retained by the plaintiff, Mark Richardson, in an initial 4-

page affidavit, did made the general statement that members of the Class have a greater

See alsoReference Manual on Scientific Evidence, 2nd ed., Reference Guide on Toxicology, pp. 412-13, 422-24 (Federal Judicial Center 2000)

33 Becking Report, pp. 7-16; Inco Record, Vol. III, tab 2B, pp. 1209-18

Mark Richardson, Assessment re Arsenic Contamination in Wawa, p. 1; Joint Compendium of Exhibits andAnswers to Undertakings, Vol. II, tab J(2)


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probability (risk) of exhibiting these effects . . . than do an unexposed population (emphasis

added). However, the affidavit did not elaborate what the degree of such alleged increased risk

actually was, and the statement in fact is meaningless because there is no such thing as an

unexposed population for example, all Canadians are exposed to large amounts of nickel in

the ordinary supermarket food they eat and nickel compounds are present in the air throughout

Ontario. Furthermore, after Dr. George Becking, an internationally experienced toxicologist

with the World Health Organization and the former Chief of Health Canadas Division of

Environmental and Occupational Toxicology, carefully pointed out why there is no significant

health risk even at the unrealistically high exposures conservatively assumed by the MOE, the

plaintiffs risk assessor effectively retracted his original comment. In his later response to Dr.

Becking, the plaintiffs risk assessor stated until such time as exposures can be more accurately

and validly determined . . . it is inappropriate to categorize any of those chronic effects that have

been associated with those contaminant exposures . . . as less likely or more likely to occur.35

55. The extremely low levels of risk and the inherent variability of risk assessmentcan be seen, by way of example, in the competing analyses of cancer risks. Certain nickel

compounds have been associated with particular kinds of nasal and lung cancers but only under

conditions of prolonged exposure and only through inhalation and only at extremely high

workplace air concentrations (in past generations) at levels on the order of one million times

greater than that in the ambient air in Port Colborne. For example, a cohort of workers in the

34 Review of Dr. Tor Norseth, p. 6; Inco Record, Vol. IV, tab 7A, p. 1319

35 Affidavit of Dr. Mark Richardson, para. 11; Plaintiffs Record, Vol. I, tab 4, p. 85

Becking Report; Inco Record, Vol. III, tab 2B, pp. 1202-24

Supplementary Affidavit of Dr. Mark Richardson, Ex. A, p. 1; Plaintiffs Supplementary Record, tab 2A, p. 18

Supplementary Affidavit of Dr. George Becking; Inco Record, Vol. IV, tab 7, pp. 1301-1311


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Port Colborne facility who were exposed to nickel refinery dust levels only 100,000 times

greater than present in Port Colborne today showed no increase in cancer. And in a 1997 study

of the actual health condition of Port Colborne residents, updated in 2000, the MOE and the

Regional Health Department found no increased incidences of cancer (and no adverse health

effects at all) from environmental exposures.36

56. Nevertheless, risk assessment in its conservatism attempts to extrapolate throughmathematical modelling the theoretical risk of cancer even at levels of exposure much lower

than that at which cancer has ever been observed. These models assume that there is no

threshold level beneath which there is no risk and, for nickel, are based on the carcinogenic

potency of nickel refinery dust since an association with cancer has only been seen among

workers in the dustiest nickel facilities of the past. (In the case of nickel oxide, these policy-

based assumptions are contrary to research that demonstrates both a threshold level and a

potency that is only a small fraction of the potency of the primary component of refinery dust

nickel subsulphide which is not present in Port Colborne air today since it would have broken

down decades ago.) Thus, risk assessment is an inexact science and different agencies arrive at

different risk factors based on the data, models and assumptions used. The MOE has observed

that, based on current air nickel measurements, the various models calculate a lifetime cancer

risk of anywhere between 3 and 16 in a million. Even then, the MOE assumes the nickel in the

air is of the same potency as nickel refinery dust, which is highly unlikely since nickel

subsulphide is not present in the ambient air. The plaintiffs risk assessor, by ignoring the

research with regard to potency, using decade-old air measurements (three times higher than


1997 MOE Health Study, pp. 46-47 ; Inco Record Indoor Sampling Motion, tab A1, p. 46

2000 Update; Affidavit of Dr. Robina Williams, tab B

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current measurements) and employing the most conservative of the various models, has derived a

figure of 40 in a million. Dr. Norseth, by contrast, takes into account the lower cancer potency

of nickel oxide and concludes for all practical purposes that there is no cancer risk from nickel

exposure in Rodney Street residents. Dr. Becking, who likewise takes into account the latest

toxicological research, estimates a lifetime cancer risk in Port Colborne of less than 1 in 1

million. In a town of 18,000, even a lifetime cancer risk as high as 1 in 100,000 would mean that

it is unlikely that even one person living in Port Colborne will get cancer as a result of inhaling

nickel in the ambient air.37

57. As the plaintiffs risk assessor has pointed out, when characterizing estimatedcancer risks at the low end of the spectrum: the setting ofdeminimis levels is one of policy, not

science. Acceptable risk levels range from 1 in 10,000 to 1 in 1 million for various jurisdictions

across Canada, and certain risk management criteria [for arsenic in drinking water] approach a

carcinogenic risk level of 1 in 1,000. The plaintiffs risk assessor, nevertheless, seems to

suggest that the appropriate policy for intervention in Port Colborne is a 1 in 1 million risk

derived in accordance with his method of analysis. He does not indicate if the same policy

should apply to nickel in the air in Ottawa, Toronto and the rest of Southern Ontario, where his

37 MOE March 2002 Report, Part B, p. 81; Crown Record, Vol. III, Tab F

Review of Dr. Tor Norseth, p.5; Inco Record, Vol. IV, tab 7A, p. 1316

Letter of Mark Richardson to Eric Gillespie, p. 2; Plaintiffs Supplementary Record, tab 2A, p. 62

Becking Report, p. 18; Inco Record, Vol. III, tab 2B, p. 1220

Supplementary Affidavit of Dr. George Becking, para. 17; Inco Record, Vol. IV, tab , p. 1310

Affidavit of Dr. Bruce Conard, para. 68; Inco Record, Vol. I, tab 1, pp. 27-28

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method of analysis likewise leads to calculated risk levels well in excess of such an intervention

level.38

58. More importantly for present purposes, outside of the realm of policy, low levelsof risk from a given environmental condition have important implications with respect to any

attempt to attribute causation of a health effect to that condition. In particular, it makes the task

of attempting to show a causal connection that much more individualized. As Dr. Becking has

explained:

[O]ne cannot infer causality on an individual basis without a thorough

assessment of the individual in question; that is, his/her symptoms,

personal and family medical history, lifestyle, diet, occupation and other

individualized factors, including a detailed exposure assessment. This is

particularly important when the estimated risk from the alleged causal

agent is low, and the disease is known to occur independently of the

chemical. For example, if one is examining the possible individual

causation of birth defects by a particular substance [one of the effects

alleged by the plaintiff], consideration must be given to the fact that there

is a background incidence of birth defects as a result of nonspecific

genetic and/or environmental factors. And, birth defects can occur in the

absence of the substance under investigation, from insufficient intake of

folic acid or by the excess consumption of alcohol during pregnancy.

Even for chemical exposures, there is a variation in response within any

group of individuals exposed to the same dose. For example, not all

women taking the same dose of thalidomide gave birth to infants with

birth defects, indicating other individualized factors (e.g. day of gestation

38 Mark Richardson, Assessment re Arsenic Contamination in Wawa, Appendix 1; Joint Compendium of Exhibitsand Answers to Undertakings, Vol. II, tab J(2)

Compare Letter of Mark Richardson to Eric Gillespie, p. 2; Plaintiffs Supplementary Record, tab 2A, p. 62(calculating that 1 in 1 million risk occurs at a concentration of 0.0008 g/m3) with March 2002 MOE Report,Part B, Appendix 1, p. 2; Crown Record, Vol. II, tab F (showing measured air levels of respirable-size nickel tobe about 4 times this level in Ottawa, 5 times this level in Toronto and 7 times this level in Port Colborne)

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for administration of drug) played a role in the generation of such adverse

effects. Another example is the development of respiratory cancer in

humans. Both smoking and diet are known to be environmental risk

factors for the development of lung cancer, in the absence of exposure to

any suspected chemical substance.

Through well designed and executed studies of populations, epidemiology

can infer general causality; that is, whether an agent has the capability of

causing a disease, but not whether it did cause a specific individuals

disease. Studies of individual causation will need to utilize similar

procedures as those employed in clinical medicine to make detailed

assessments of individual patients.

As pointed out above, the plaintiffs risk assessor agrees that assessing individual risk and

attributing individual causation of disease necessarily involve fact-intensive individualized

inquiries.39

3. Determining Property Effects and Their Cause

59. The only evidence in the record concerning the process by which property-valueeffects and their causes can be determined is that of Dr. Frank Clayton. Dr. Clayton is a widely

recognized expert on urban growth processes and real estate markets, trained in economic and

statistical analysis of housing markets. He has conducted site-specific real estate market

analyses and, before establishing his own real estate research and consulting firm, worked for

CMHC in urban and regional economic and housing analysis, housing data, and housing policy.40

60. According to Dr. Claytons evidence which was not controverted or cross-examined, the process for determining whether, and the extent to which, individual property

owners in Port Colborne have suffered economic losses as a result of possible effects of Incos

39 Becking Report, pp. 21-22; Inco Record, Vol. III, tab 2B, pp 1223-24

40 Affidavit of Dr. Frank Clayton, Ex. A; Inco Record, Vol. III, tab 3A, pp. 1234-35

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refinery on property values is an extremely difficult one that is inherently a property-specific and

owner-specific inquiry.41

61. Dr. Clayton explains that a houses value at any given point in time is function ofa complex set of factors that include its size and configuration, number of bedrooms, bathrooms

and fireplaces, age and condition, renovations, neighbourhood incomes and houses, proximity to

amenities, property tax rates, local crime rate and others. A close examination of an individual

property in question is necessary to determining whether and to what extent particular factors

affect that homes value.42

62. For illustrative purposes, Dr. Clayton compiled and examined sales data from PortColborne and other area towns from 1998-2001. This data does not show a noticeable change to

the overall residential property market in Port Colborne following the public announcement

concerning higher than expected soil contaminant results in September 2000. In fact, the biggest

jump in Port Colborne average sale prices occurred in the period immediately following the

announcement: prices went up about $8,000 (about 9%) between the 10-month period preceding

September 2000 and the 10-month period following September 2000. This jump was greater in

both absolute and percentage terms than increases over the same periods in Welland, Niagara

Falls and Fort Erie.43

63. The plaintiff has put in evidence showing a somewhat lower rate of priceincreases in Port Colborne from differently selected periods e.g. an increase of $3,000 or 2.8%

from the 12-month period preceding October 1, 2000, to the 12-month period following October

1, 2000. The plaintiff also put in data showing a very sharp decrease in average sale prices in the

41 Affidavit of Dr. Frank Clayton, para. 4; Inco Record, Vol. III, tab 3, p. 1226

42 Affidavit of Dr. Frank Clayton, paras. 5-8; Inco Record, Vol. III, tab 3, pp. 1227-28

43 Affidavit of Dr. Frank Clayton, Ex. C; Inco Record, Vol. III, tab 3C, p. 1239

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Rodney Street area in the 12-month period following October 1, 1999 i.e. in the year prior to

the September 2000 announcement with prices actually recovering somewhat following the

announcement of the higher than expected soil nickel measurements in the area. This data is

flatly inconsistent with the plaintiffs evidence that the September 2000 announcement was the

only general event of any significance in the Rodney Street housing market since 1998.44

64. The plaintiffs factum, at paragraphs 22 and 54, seems to backtrack and suggest,presumably to be more consistent with the data, that news of the contamination actually

emerged earlier than September 2000. While such an approach (had it not been contrary to the

plaintiffs own evidence) would partially dodge the inconsistency with the data, it would require

an even more searching individualized inquiry since there was general awareness of heightened

metal levels for decades prior to September 2000 and no discrete event to which the plaintiff has

pointed or can point other than the September 2000 announcement. In the words of the

plaintiffs witness, the only major event that has taken place in Port Colbornes real estate

market since October of 1998 is the announcement of contamination in the Rodney Street area.

Each homeowners situation would be that more idiosyncratic.45

65. It was also revealed on cross-examination of the plaintiffs real estate agent thatthe Rodney Street figures presented were based on a handful of sales and unrefined data

selection. No attempt was made to show statistical significance or statistically valid associations

or conclusions, and it is highly doubtful any could be possible on the limited data. In particular,

there were only four Rodney Street sales in 1999, 6 in 2000 (3 before and 3 after September

44 Affidavit of Rose Wallington, Ex. A; Plaintiffs Supplementary Record, tab 4A, pp. 92-94

Affidavit of Bill Berkhout, para. 12; Plaintiffs Supplementary Record, tab 5, pp. 98-99

Supra note 16 (citing evidence that the critical announcement was made in September 2000)

45 Affidavit of Bill Berkhout, para. 12; Plaintiffs Supplementary Record, tab 5, pp. 98-99

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2000) and 3 in the first 9 months of 2001. The plaintiffs consultant (who happens to be the

daughter of the representative plaintiff in another class action brought by plaintiffs counsel)

uncritically relied on all sales reported in the MLS system without any attempt to detect or filter

out possible non-arms length transactions. She testified that she did not look behind the listed

sales figures because she was not asked to do so by plaintiffs counsel. Thus, for example, she

did not exclude a house over which the tenant had a right of first refusal or conduct any

investigation as to whether this or any other listed sales might not have been entirely arms-

length. Given the very limited number of annual sales in the Rodney Street area, excluding that

one house from her data pool would have increased the average sale price by 20% in the relevant

period.46

66. Moreover, the plaintiff presented no evidence about the nature of the processrequired for determining the existence, cause and extent of possible property-related gains or

losses over time for any individual home. Dr. Clayton, on the other hand, pointed out that while

the data does not rule out the possibility that a particular property suffered a property value

impact as a result of the announcement, it does reinforce the conclusion that a case-by-case

assessment is unavoidable if one is to attempt to estimate the existence and extent of any such

impact on individual properties. In addition, Dr. Clayton observed that, even if a property value

impact can be shown and causally linked to a particular environmental factor to the exclusion of

all others, a further individualized analysis is required to determine the actual economic effect

such an impact had on the individual property owner. The existence of any gain or loss depends

upon, among other things, when a property owner bought, sold, and/or refinanced his home and

the knowledge or perception of the parties at the time of the various transactions.47

46 Cross-Examination of Rose Wallington, pp. 8-10, 12-15, 23-24, 26-28, 30, 42-43, 49-50

47 Affidavit of Dr. Frank Clayton, paras. 16-19; Inco Record, Vol. III, tab 3, pp. 1230-31

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4. Determining Agricultural Effects and Their Cause

67. The largest claims anticipated by the plaintiff are those of farm claimants,predicted to range up to $500,000 per claimant.48

68. The only evidence concerning the necessary steps for evaluating the cause andextent of alleged plant and agricultural crop effects was that of Ron Pearson, an expert in

phytoxicology who was a leader in developing and writing Ontarios current Guideline for Use

at Contaminated Sites in Ontario when he was employed by the MOE. Mr. Pearson has

published extensively on the effects of air and soil pollutants on vegetation and agricultural

crops.49

69. According to Pearson, identifying any crop loss damage due to nickel or otherform of phytotoxicity requires assessment on a property by property basis. . . . [T]here is no

scientific basis for assessing such damages based solely on the location of a given farm property

in one or more alleged zones of soil metal contamination.50

70. Pearson outlined the major steps involved in attempting to prove or rebut a claimthat crop loss was caused by nickel in the soil in a given field:

The field must be sampled to determine its nickel levels. Testing to date has shown awide variance in nickel levels and thus it is impossible to reliably predict nickel levels

without testing.

Each crop would have to be visually assessed for evidence of nickel-related toxicitysymptoms which vary between crops and even between cultivars of the same crop.

48 Affidavit of Wolfgang Kaufmann, paras. 62-65; Plaintiffs Record, Vol. I, tab 3, pp. 40-41

49 Affidavit of Ron Pearson, Ex. A; Inco Record, Vol. III, tab 4A, pp. 1267-71

50 Affidavit of Ron Pearson, para. 11; Inco Record, Vol. III, tab 4, p. 1260

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Affected tissues would have to be sampled and analyzed to confirm that any foliarsymptoms are consistent with generally accepted phytotoxicity thresholds and to rule

out mimicking symptoms caused by other agents (e.g. insect damage, nutrient

deficiencies).

Measured soil metal concentrations would have to be considered in relation tovariables that influence the availability of the metal to plant roots, its uptake and

accumulation by plants and its impact on growth/productivity, including soil type

(e.g. clay/silt/sand composition, organic matter content), soil acidity, soil nutrient

status and soil metal chemical form.

Other factors that significantly influence potential crop yield at a given farm propertywould have to be considered, including meteorological influences, soil capability

classification and farm management practices (e.g. weed control, soil drainage,

varietal selection, seed quality, planting date, soil pH maintenance)51

71. According to Mr. Pearson, [w]ithout specific information on these factors on ayear-by-year and field-by-field basis, it would not be possible to ascribe variations or reductions

in crop yield . . . to a single component such as soil nickel concentration. By way of example,

Mr. Pearson shows the high degree of variability from one year to another in the data for overall

grain corn yields collected for the Niagara region. In sum, the determination of crop

productivity impacts at a given soil nickel concentration must be conducted on a year-by-year,

field-by-field, and crop-by-crop basis, with observations by trained professionals, sampling and

analysis of crop tissues and soil for various elements and an evaluation of individual farmers

crop and soil management practices, all of which directly affect crop yield potential in any given

field in any given year.52

5. Determining Local Subsidence Effects and Their Cause

51 Affidavit of Ron Pearson, paras. 16-23; Inco Record, Vol. III, tab 4 pp. 1261-64

52 Affidavit of Ron Pearson, paras. 24-25; Inco Record, Vol. III, tab 4, pp. 1264-65

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72. The plaintiff has alleged that homes in the Rodney Street area have sufferedsettlement damage as a result of soil subsidence caused by nearby pumping of groundwater at the

refinery site.53

73. Inco began studying groundwater at the facility as part of developing a closureplan for the facility under theMining Act. After testing the feasibility of pumping in the bedrock

to prevent the escape of any contaminated groundwater, in 1998 Inco installed a purge well

system to capture potentially contaminated groundwater. Although there are no data showing

any settlement in the area as a result of the system or any pressure reduction in the soil profile,

the plaintiff has attached to his materials a letter from a consulting engineer stating that it is

reasonably probable that the purge well system has caused or contributed to soil settlement

in the area. This conclusion, reached after a one-day visit to the area, was based merely on

general reports of settlement by local residents, the location of the purge wells and the generally

soft nature of the soil in the area. The letter makes the assumption that settlement damage

occurred within about the last three years (i.e. afterthe installation of the purge well system).54

74. The plaintiff, however, has not put in any evidence as to what steps are necessaryeither to determine whether settlement damage has actually occurred at a given home or whether

any such damage was caused by the purge well system. The only evidence on this subject,

which is unchallenged, is that of Bryan Watts, P. Eng., a geotechnical engineer with extensive

experience in the design of foundations on weak, compressible soils and, in particular, on peats

and organic silts and clays (common soil components in the Rodney Street area). Mr. Watts and

53 Affidavit of Wilfred Pearson, para. 13; Plaintiffs Record, Vol. I, tab 2, p. 12

54 Affidavit of Bryan Watts, P. Eng., paras. 10-11; Inco Record, Vol. III, tab 5, p. 1283

Supplementary Affidavit of Wolfgang Kaufmann, Ex. A; Plaintiffs Supplementary Record, tab 3A, pp. 67-69

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engineers working with him have visited the facility, examined the subsurface operations at the

facility, inspected the Rodney Street neighbourhood and studied ground conditions in the area.55

75. Mr. Watts notes that while some homes in the neighbourhood display signs ofstress possibly due to settlement, most do not exhibit any visible damage. He explains that

determining the cause of any existing damage for any particular home would have to be a highly

home-specific and location-specific inquiry, and this is especially so in the Rodney Street area.

In particular:

Homes in the area are old and of modest construction and quality. Many have timberfoundations that are susceptible to rot without proper treatment and maintenance.

The area is low-lying near the shore of Lake Erie. The ground is comprised ofdiscontinuous deposits of compressible peat/clay/silt soils and infill of variable

thickness resting on bedrock. Peat is one of the most compressible soils in nature

and, if not properly treated prior to development, will always lead to settlement over

time. Yet there is no indication of consistent site preparation in the area. Because of

the discontinuous and variable nature of the soil, each house is subject to its own setof ground conditions.

In such ground conditions, numerous factors that could likely cause or contribute tohome damage are especially important to consider, including (i) poor maintenance,

(ii) excavation work, (iii) poor drainage conditions, (iv) aging, (v) poor site

development, (vi) poor construction, (vii) poor interior renovations, (viii) additions

and construction of adjacent homes, and (ix) the accumulated or combined effects of

some or all of these.

Other site-specific factors that an engineer would have to look include the homesdistance from the purge wells, its proximity to the lake and other sources of watering

and dewatering (like storm runoff).56

55 Affidavit of Bryan Watts, P. Eng., paras. 2-4; Inco Record, Vol. III, tab 5, p. 1281

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76. Moreover, each house itself and its history of damage, if any, would have to beanalyzed carefully to determine what was the cause of the alleged damage. For example,

photographs and other historical evidence are necessary to assess when and how quickly damage

occurred in assessing causation it is obviously important to know whether settlement damage

dated from prior to the installation of the purge well system in 1998. The critical importance of

this home-specific information is demonstrated by the evidence of the plaintiff himself.

According to the plaintiff:

In June of 1992, I first observed that portions of the middle of our home were

beginning to shift and sag towards the east. In the spring of 1995, I first observed

that portions of the foundation . . . were starting to develop significant cracks.

That is, even the one allegation of home damage particularized in the pleadings will have to

account individually for the fact that it dates from three to six years before the Inco purge well

system went into operation.57

E. The CBRA and the Regulatory Process Underway in Port Colborne

1. The CBRA

77. The CBRA emerged out of discussions among the City, the MOE and Inco in thelate 1990s. The enactment of environmental guidelines governing development of properties had

raised concerns about the number of properties in Port Colborne which might become subject to

remediation or assessment. Typically, if soil conditions on a property exceed generic limits

under the guidelines, either cleanup to the generic level or a site specific risk assessment (SSRA)

56 Affidavit of Bryan Watts, P. Eng., paras. 5-9, 14; Inco Record, Vol. III, tab 5, pp. 1281-82, 1284

57 Affidavit of Bryan Watts, P. Eng., para. 15; Inco Record, Vol. III, tab 5, p. 1284

Affidavit of Wilfred Pearson, para. 12; Plaintiffs Record, Vol. I, tab 2, p. 11

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is required before the property can be redeveloped or rezoned. An SSRA is an involved process

whereby, through study and testing, risk-based soil guidelines specific to the property in question

are developed at the property owners expense and any necessary remediation is then carried out.

In the case of Port Colborne, a thousand or more properties might have been subject to SSRAs in

order to be eligible for rezoning or development as a result of anticipated levels of nickel, copper

or cobalt in the soil. As a practical matter, that many SSRAs could take decades to complete,

obtain MOE approval and implement and each would be the responsibility of individual

landowners to obtain.58

78. Inco recognized that historic operations of its refinery in Port Colborne,especially in earlier years, had resulted in the accumulation of these substances in area surface

soils. Inco felt a social responsibility to assist Port Colborne residents with assessment and

possible remediation of their lands to the extent current conditions were linked to emissions from

the refinery. Inco therefore undertook to fund and carry out a comprehensive risk assessment for

the entire Port Colborne community and to implement any remediation called for as a result.

This process came to be called the Community Based Risk Assessment or CBRA. The concept

was approved in principle by the MOE (and recognized as an appropriate surrogate for the SSRA

process) in late 1999 and by the City in March 2000.59

79. Inco retained a consultant to develop the technical details of the CBRA and alsoagreed to pay for an independent technical consultant to advise the Public Liaison Committee

(PLC) appointed by the City Council as the publics representative in the process. In

November 2000, Incos consultant presented a report laying out the technical scope of work for

58 Affidavit of Dr. Bruce Conard, paras. 78, 80; Inco Record, Vol. I. tab 1, pp. 31-32


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the CBRA. The PLC, the City Council and the MOE approved the scope of work in December

2000 and January 2001.60

80. The CBRA is based on the SSRA approach under the MOEs decommissioningguidelines but is designed to be applicable to multiple properties instead of just one. This is to

be accomplished by, among other things, the construction of a computer model for estimating

risk, into which the precise soil parameters of individual sites would be fed. The model would

then indicate whether risks exist for the site given its unique soil characteristics, its proposed

use, the composition and concentration of metals and numerous other factors and what

remediation, if any, would be appropriate for the site. The studies, assessments and collection of

scientific data required for such a model are extensive. They include, among other things,

human health risk assessments and ecological risk assessments for each chemical of concern

identified in the CBRA (nickel, copper, cobalt and arsenic).61

81. Once the CBRA model is fully constructed, and approved by the MOE, individualproperty sampling will begin. Suitable remediation, if and where called for by the CBRA model,

will depend on individual property characteristics. Both the risk assessment and remediation

phases are being fully funded by Inco, with the assessment portion alone having a cost in excess

of $5 million. In the absence of complications arising from this lawsuit or otherwise, the CBRA

59 Affidavit of Dr. Bruce Conard, paras. 79, 81-82; Inco Record, Vol. I. tab 1, pp. 31-32

60 Affidavit of Dr. Bruce Conard, paras. 85-86; Inco Record, Vol. I. tab 1, pp. 31-32


61 Affidavit of Dr. Bruce Conard, paras. 84, 87-91; Inco Record, Vol. I. tab 1, pp. 31-35

Affidavit of Paul Nieweglowski, para. 54; Crown Record

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model is expected to be substantially complete by the end of 2002 with remediation, if and where

called for, to begin thereafter.62

82. In conjunction and in parallel with the CBRA, and in response to public input,much other work is being and will be carried out at Incos expense, such as an occupational

clinical survey of former and present Port Colborne refinery workers and an extensive human

health study of the community, which includes a number of sub-studies, to comprehensively

assess the current health of City residents. Another study is looking at property value impacts on

residential properties. (As discussed below, an attempt to carry out a related health study by the

Region for the Rodney Street neighbourhood was scuttled due to poor participation after class

counsel mounted a public campaign attacking it.)63

2. Advantages of the CBRA

83. The CBRA offers Port Colborne community-wide assessment and necessaryremediation on a no-questions-asked basis, entirely at the expense of Inco: (i) beneficiaries do

not have to show that all or most of any chemicals of concerns found on their property actually

originated with Inco; (ii) beneficiaries do not have to show that they or their property were

caused any actual harm; (iii) beneficiaries do not have to show legal liability on the part of Inco

and are not subject to legal defences Inco would have in court; (iv) beneficiaries do not have to

show that the CBRA model, constructed in accordance with the conservative principles of risk

assessment, yielded results for their properties that would meet far stricter judicial standards of


Affidavit of Kal Haniff, para. 12; Crown Record, Vol. IV, tab 3

63 Affidavit of Dr. Bruce Conard, para. 98; Inco Record, Vol. I, tab 1, pp. 37-38

Affidavit of Paul Nieweglowski, paras. 10-13; Crown Record

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proof requiring a balance of probabilities; (v) residents do not forgo any rights to seek further

financial compensation in addition to the cost of the assessment and remediation Inco is

providing.64

84. As a scientific undertaking, the CBRA employs an open and consultative, ratherthan adversarial, approach. It brings together the collective wisdom of independent experts

advising the public, the MOE, the Region and Inco. It seeks scientific consensus based on the

most advanced and comprehensive assembly of scientific knowledge in the relevant fields. Such

a process is a far more appropriate method for addressing evolving and complex scientific

questions than an adversarial approach.65

85. Because it has the official sanction of the relevant governmental and regulatorybodies and extends to all of Port Colborne, the CBRA will ensure not only that individual

properties are approved and safe for use and development but also that Port Colborne as a whole

is recognized as a healthy place to live with all of its lands safe for productive use. Thus, in

terms of the value it offers to City residents, the CBRA will provide for full community-wide

cleanup to regulatory standards and supply substantial accumulated information about

community health and welfare. In addition, the expert evidence shows, a comprehensive

community-wide remediation effort such as the CBRA tends to have a pronounced effect on



65 Affidavit of Dr. Bruce Conard, para. 95; Inco Record, Vol. I, tab 1 pp. 36-37


Affidavit of Dave McLaughlin, para. 80(c), (g); Crown Record, Vol. I, tab 1

Affidavit of James Smith, para. 50; Crown Record, Vol. II. tab 2

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eliminating any stigma effects on property, thereby further benefiting the City as a whole and

individual residents.66

3. Outside the CBRA the Regulatory Process

86. The CBRA is only one, albeit an important, aspect of the process underway inPort Colborne to address environmental concerns, both Inco-related and beyond. The Rodney

Street risk assessment by the MOE and remediation by Inco has gone ahead separate from and in

advance of the CBRA schedule. The Region has also carried out a lead screening study for over

1,000 Port Colborne residents (finding normal overall blood levels). The MOE has carried out

extensive soil sampling at area schools. The Region has attempted to carry out its own broad

health study in the Rodney Street area. Long prior to this lawsuit, the MOE has been actively

engaged in Port Colborne and, among other things, has conducted a detailed human health risk

assessment for all of Port Colborne finding no increased risk of adverse health effects.67

87. Furthermore, the MOE has fully engaged its regulatory jurisdiction. For example,in its March 2002 Order, the MOE has not only required a cleanup of the holdout properties in

the Rodney Street area (which plaintiffs counsel has blocked to date) but also requires

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