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Will Susan Heyes win if case is appealed? Look at the past

May 28th, 2009 · 28 Comments

Here’s my latest on the Canada Line/Susan Heyes decision, which looks at the previous big case that went down in B.C. between an agency building a public project and people who felt that they’d suffered as a result.

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  • A. G. Tsakumis

    Frances:

    Forgive me, but the two examples you have cited couldn’t possibly be more different.

    The case law relevant here will likely facilitate a discussion with respect to the very narrow nature of the decision, thus, the airport example is not only outside the logical lines of precedent, but would be such a stretch so as to need to manufacture a link.

    You have produced three different posts, which, again, if you’ll forgive me, sound as if you are somehow suggesting that the decision is either weak or worthy of being overturned.

    At the heart of the matter, is whether Susan was injured as a result of the course SWITCH. This was not the case with the plaintiffs in the airport matter and their inherent weakness was also that living right near the airport includes a margin of risk of being impacted by projects or activities related to living precisely next to such a facility.

    That was obviously never the case with Susan. When she moved into the area it would have been impossible to know that there was any risk involved at all, in birthing a business that would eventually suffer injury as a result of a govt project that would banner a frustrated process.

    That stated, it is in the very narrow nature of the distinction made by Mr. Justice Pitfield that it was an injury that needed redress. The non-judgements on the govt or their intent at the genesis of this project preclude an easy defence motion for appeal.

    Yet, you still ended your column with a comment from Translink’ lawyer, like the sword of Damocles hanging over Susan’s head.

    How ’bout a comment that relates to the disgraceful manner with which she was dealt by the Premier and his henchmen? How ’bout some commentary about a process bereft of even a pedestrian fairness doctrine?

    Susan Hayes was screwed over, and a judge made it right along very narrow lines that will make it difficult to appeal.

    Is this distinction not clear yet?

    With respect.

  • fbula

    Alex,

    The reason I am pursuing the lines of research that I am is that EVERY lawyer I’ve talked to have said this is likely to be appealed, as has Leonard. It’s just too big an issue not to be, since it has ramifications for every publically funded project in the country.

    And the Sutherland case is also the case that every lawyer familiar with public projects/nuisance and so on referred to. I don’t fancy myself such a legal expert that I would dream up this parallel on my own. It’s cited in the judgment and it’s the major case that is somewhat parallel. However, as the vast majority of the people speaking in my story point out, there is a significant different with respect to what happened during the construction process, i.e. a less-onerous method was dumped and a more-onerous (for the businesses on Cambie, anyway) one used instead.

    There are lots of other people commenting on how Susan was treated. That’s not my job. I was asked to do and was happy to pursue a particular piece of legal context.

  • T W

    My guess is that on appeal, the finding will stand. There was, I recall, almost no attempt to accomodate the concerns of the business community and, if my recall is correct, very cursory consultation. That is where the nuisance claim arises – the weak response by the proponent, or am I misreading the facts.

  • The case will certainly be appealed since similar principles will apply to all other merchants in the area and to every large scale construction project. If the decision stands, urban cut and cover tunneling will be extinct because its economic advantage is now gone. Perhaps government will try new legislation to avoid responsibility but I suspect constitutional law will make that difficult.

    In future, public agencies will need to be involved in honest and effective programs to ameliorate damages to other properties.

    From the written judgment:

    “The tort of nuisance is concerned only with the effect of the use of one’s land upon the use and enjoyment of the land owned or occupied by another…”

    “The tort of nuisance also differs from that of negligence in that economic loss occasioned by the nuisance is fully compensable without limitation, provided the loss is proved on the balance of probabilities…”

    It may be difficult to overturn this decision.

  • michael geller

    This is a topic worthy of further commentary…but first, I can’t ignore Alex T’s

    “When she moved into the area it would have been impossible to know that there was any risk involved at all, in birthing a business….”

    Birthing a business in Maternity Wear. I love it!

    Now, back to the matter at hand…Since my discussion on Bill Good’s show and with The Province’s John Birmingham, I have been told by lawyers that an important consideration in this case, and Leonard Shein alludes to it….is the fact that it was a private company undertaking this work, under a P3 structure. So in effect, one company was saving money, at another company’s expense.

    This of course is different from most other public infrastructure projects where the Public Agency may contract with a private contractor, but it is ‘the developer’ as distinct from a P3 partner.

    I’ll be interested in hearing from other lawyers whether they agree that this is an important distinction. Of course, I’ll also be interested in reading what the regular contributors to this blog have to say, since, like me, they rarely let a lack of professional accreditation to interfere with their willingness to offer views!

  • DMJ

    There is much more about this lawsuit that has remained unsaid, including judge Pittfield’s comment that the “RAV P-3 was a charade”.

    But there is more and if this goes to appeal, more might be made of some incidental facts. One is the confusing term of ‘rapid transit’ and using statistics pertaining to LRT, to bolster the case to build subway or light-metro (SkyTrain).

    The transit specialists I have communicated with are all in agreement on one thing – cut and cover subway construction is detrimental to adjacent businesses and that subway do not improve surface businesses, as well they are poor in attracting new ridership. Now, new LRT/streetcar lines like Portland report that businesses along a LRT/streetcar line improve by about 10%.

    Here is the problem for the appeal, the Appeals court will look at the case again in its entirety and might rule against the defendants and expose some very embarrassing items, just like what BC Railgate has done.

    The Appeals Court may greatly increase compensation to Ms. Heyes or they may overturn the judgment.

    I believe that judge Pittfield wisely reverted back to the basics – did one party’s actions detrimentally affect another party’s business and is compensation warranted.

    I do not think InTransit BC would want a second look at the so-called RAV P-3 which will again come under the microscope of an appeal.

    May I remind everyone of Gerald Fox’s (noted US transit planner) comments on the Evergreen Line and TransLink as the pertains to RAV/Canada line as well, just read light-metro for SkyTrain:

    “It is interesting how TransLink has used this cunning method of manipulating analysis to justify SkyTrain in corridor after corridor, and has thus succeeded in keeping its proprietary rail system expanding. In the US, all new transit
    projects that seek federal support are now subjected to scrutiny by a panel of transit peers, selected and monitored by the federal government, to ensure that projects are analyzed honestly, and the taxpayers’ interests are protected. No SkyTrain project has ever passed this scrutiny in the US.”

  • T W

    P3 projects were (in theory) to share risk between the public and private sectors.

    What I am not entirely clear on is whether the legal risk, as evidenced by the court decision, remains with the public sector part or the private sector part. What has not been commented on is whether there is a residual legal risk in other P3 projects in BC.

    Anyone care to comment ?

  • T W

    I omitted one significant concern.

    We,as taxpayers, are throwing billions of dollars out of the back of a truck on infrastructure projects across Canada and if the risk managers at the federal, provincial and corporate level cannot get it right or assess risk adequately, then we, as taxpayers, are being gored.

    Over to our elected representatives for an answer.

  • DMJ

    Sad fact is, if RAVCo. or InTransit BC put aside a compensation package for local businesses, like what Seattle transit did, to mitigate loss of business due to construction, this would not have happened.

    The truth was, the costs for RAV were spinning out of control and InTransit BC did the old switcheroo from bored tunnel to cut and cover to save money at others expense. If Heyes’s judgment stands, I doubt there was any savings at all.

    But there is a lot more to the RAV story, only the mainstream media refuse to touch it.

    TW – definition of an infrastructure project: spending billions dollars more on a politically prestigious mega-project, just for the sake of spending billion of dollars more!

  • foo

    Some comments:

    1. Nowhere did the judge say the P3 was a charade. The only reference he made to this was that the P3 partnership is not a partnership in a legal sense that would make the govt liable to be sued. Hence, the claims against the provincial and federal govts were denied.

    2. The finding says nothing about one private company making a profit at another’s expense. That’s a red herring. All the judge said is that the choice of cut’n’cover over bored tunnel caused a nuisance to Hazel&co specifically, and since it was a choice, it was unreasonable to Hazel&co.

    “[203] In the result, because there was an alternative method of construction that
    would not have caused a nuisance in the Cambie Village area, the statutory authority defence must fail. ”

    The implication is that statutory authority defence would have held if the bored tunnel was chosen. That doesn’t bode well for anyone in the vicinity of the tunnel openings (downtown and at Cambie/2nd), or people who would have been near the tunnel opening (Cambie/King Ed).

    3. Note that the defendents and the judge agreed that the only parties that could be found liable are Translink, CLRT (the company established to manage the development of the line), and InTransit (the company established to run the line). InTransit is essentially the “private” part of the P3. CLRT is a subsidiary of Translink, so I guess that makes the liability 2/3 govt, 1/3 private. Note that the various govts are not directly liable at all.

    3. The judge didn’t find that Translink et al acted in bad faith:
    “[222] Counsel on behalf of Hazel & Co. asked me to consider making an award of
    exemplary damages on the basis that CLRT, TransLink and InTransit BC acted with
    cavalier disregard for the impact of their business decisions upon the plaintiff. With
    respect, and having regard for all of the evidence that was adduced, I am of the
    opinion that those defendants believed they were acting in the public interest in
    relation to a project of considerable complexity. Their failing was not their conduct,
    but their omission to recognize that their choice of a nuisance-making method of
    construction would result in liability for the loss sustained by the plaintiff. Exemplary
    damages are not warranted. ”

    4. Really, what it comes down to, is that the judge said that saving $400m for the taxpayer couldn’t be done at the expense of a private party. But he seems to imply that if Translink had chosen not to save $400m, then the private parties could all go take a hike. Odd.

  • DMJ

    Actually the judge did say this during the trial and was reported to me by Susan Heyes. When she has taken some time off, she is going to list all the interesting statement from this trial, many will prove embarrassing to TransLink.

    What is lost is that judge Pittfield reverted to common law where the actions of one party affects the business of another and should that party be compensated. The judge’s ruling shows that he believed compensation should be paid.

    An appeal will look at the whole case again, including the “bad faith aspect” and may render in favour of the plaintiff. Appeal is not just for monetary renumeration.

    The question is, will TransLink pay up or take a risk of a ‘crap shoot decision’. Corporate lawyer’s with oodles of taxpayer’s money will always go for appeal, they get paid no matter what.

    The question is: Did Intransit BC really save $400 million with cut-and-cover construction? I really doubt it.

  • Steve

    The Vancouver airport case is not close. The Cambie Street debacle was an unexpected change while the airport was not. Everyone knew, or should have knew, the second runway would come in.

    I grew up in Richmond, where the planes would come thundering in on the old diagonal runway (precursor of the first east-west runway). They’d come in 200 feet up and shake our house to the foundations. We got used to it, stopping the conversation because no one could hear you, then picking it up as if nothing had happened. Visitors to our house, however, were not so relaxed as us!

    Back in the day, we were thankful when the airport finally stopped night landings. And when they built the first east west runway to the main runway. But when they had to go back to the diagonal when the main one was closed for repairs, the thundering would start again. How close were they to our house? My brother and I would scare ourselves by watching the arriving plane through my dad’s binoculars!

    The land for the two east-west runways was expropriated many, many years before they finally built the second. I know, because my grandmother lived in the Brownsville subdivision on Sea Island and she had to sell, Then the airport sat on that land for years.

    But everyone in Richmond knew there was a second runway coming. Including all the real estate agents who sold the claimants the houses that would eventually be under the flight path of the second runway.

    I remember seeing those houses being built and wondering if people knew what they were getting into. Maybe, like the Delta powerline home owners, they bought for less because the runway effect was already priced into the selling offer?

    In any event, if those claimants against the airport had any beef, it should have been against the real estate agents who, supposedly representing their interests, didn’t tell them what the future would likely hold. People, you have to take care of your own interests. Congrats to Susan for doing just that.

    PS, I enjoyed reading Schein’s argument that one private company made money at the expense of another. Boy, that makes sense and explains why the stonewalling occurred. Doesn’t excuse it, though. Chalk one up for the little guy.

  • A. G. Tsakumis

    OK Frances, I gotcha 🙂

    Key point here by DMJ: Did we really realize $400M in savings?

    Where is the bar for this? It’s an excellent point.

    As the appeal would proceed, yes, to a total review, of course, but the judge will have little choice, if at all, not to find in support of Susan, because at the heart of the matter is: Was there an injury and was this injury precipitated by actions that were a direct result of “Transit”. The “switch in process” will likely be viewed as a mere piece of the greater issue.

    It just amazes me, frankly, that they would appeal. The govt screwed this up, they should pay.

    The Premier should be ashamed, but that would require a conscience.

  • foo

    Really, read the judgement.

    “[148] The indisputable fact which I find on the evidence in this case is that the use
    of cut and cover construction was endorsed because it was cheaper and, in
    combination with some other aspects of the SNC-Lavalin/Serco proposal, reduced
    cost by more than $400 million so as to permit construction within the range of public funding commitments. The reduction in cost was achieved by imposing an unacceptable burden on Hazel & Co.”

  • Not running for mayor

    I won’t comment on the legal rendering of this case, but I do want to clarify somthing. The RFPs and RFEOI are still availble for this project for all to see. There was no requirement for a bored tunnel along Cambie, the rfp left that desicion up to the winning bidder. So in that sense there was no switch invovled as a tunnel was never promised. Most people just “assumed” that is what would happen.

  • DMJ

    I believe the $400 million saving includes :
    1) change from SkyTrain to conventional metro,
    2) single track operation in Richmond,
    3) reducing station and station platform size in the subway to only accommodate 3-car trains,
    4) cut-and cover subway construction instead of bored tunnel,
    5) wage and benefit savings from imported workers.

    The result is:

    1) Susan Heyes lawsuit against TransLink,
    2) a truncated metro system that will never be expanded,
    3) the only metro system in the world that has less capacity than if LRT were to have been built on the Arbutus Corridor, or any route for that matter.

    This is the real story the mainstream media has all but ignored.

    I notice a SkyTrain ‘puff piece in the Province today, the spin doctors at TransLink are in high dudgeon.

  • MB

    All bidders on large projects assume there is a level playing field. They wrote their proposals from one RFP which had one set of criteria and list of requirements.

    The design-build consortium that was awarded the contract was the only one to my knowledge that proposed the cut and cover tunneling method from the Dark Ages.

  • What’s scary is how severe the impact the statutory authority defence can be. It is a high bar to cross but if crossed, Hazel & Co. would have lost.

    For example if the bore method were shown to be environmentally unacceptable and C&C was the only viable alternative, Hazel is SOL. I saw no mention of cost of alternatives entering into the decision. In other words, if C&C construction were significantly cheaper and bore rejected as being prohibitively expensive for taxpayers, is that enough for statutory authority? I am inferring no. It is likely not relevant in this case because the cost of tunnel boring was not a deal breaker but if it were?

    On a related note, cut and cover was used for the first tube lines in London in the mid 1800s. It caused so much public outcry and disruption, the technique was abandoned and tunnel boring was used for almost all below-ground tube lines after that. Plus ca change, plus c’est la meme chose.

  • [Para 130] In St. Pierre v. Ontario (Minister of Transportation and Communications), [1987] 1 S.C.R. 906, 39 D.L.R. (4th) 10 at para. 10, the Supreme Court of Canada endorsed the definition of private nuisance found in Street, The Law of Torts, 6th ed. (London: Butterworths, 1976) at p. 219:

    …A person, then, may be said to have committed the tort of private nuisance when he is held to be responsible for an act indirectly causing physical injury to land or substantially interfering with the use or enjoyment of land or of an interest in land, where, in the light of all the surrounding circumstances, this injury or interference is held to be unreasonable…
    —————————-
    Seems a pretty clear precedent from the SCOC. We should be careful – no matter how we feel about P3 – in going beyond what the decision says. The judge writes that courts will not second guess policy decisions of government but the execution of policy is not protected. As I read the judgment (and yes M.G. my lack of accreditation shall stand not in my way), every large project, public or private, must consider its duty to protect others from nuisance.

  • A. G. Tsakumis

    Norman makes a superb argument while not running for mayor gets it wrong.

    The promise by govt was clearly different from the final process. A dramatic shift regardless of what was in the RFP.

    It’s the govt’s responsibility to protect the vaery taxpayer paying for the godamned thing in the first place.

    And they didn’t.

  • not running for mayor

    AGT not sure what you are implying I got wrong, I didn’t offer any opinion just the fact that there was no switch invovled as the RFP did not specify which contruction method to use. It was up to the bidder to decide. Had the RFP specified a tunnel then it would be a different matter.
    I’m not arguing for or against the ruling just specifying that there was no switcharoo.

  • It doesn’t matter if a bored tunnel was specified in the RFP or not. It was an available option and would have caused less nuisance. That is critical. The court says if someone’s enjoyment of property is diminished, the causative actions are not excused simply because less damaging methods cost more. Had there been no means of building the system without causing the level of disruption that cut and cover did, the judgment would have been different.

    Next time, transit builders will hire engineers to advise that alternative methods cannot be used because of “technical difficulties.” That might be a defense where saving money is not.

    Perhaps, we are failing to discuss the real issue. The moral question. We should acknowledge the unfairness of damaging without compensation personal interests to achieve change that a reasonable person could not anticipate.

    If a homeowner builds near an airport, they should not be compensated for operational noise. However, if a new airport builds near existing houses and that was not reasonably anticipated, the homeowners should be compensated for nuisance.

    Builders should pay fair compensation to people damaged by surprise projects. I can anticipate that the road in front of my house or business might be closed periodically for routine maintenance but not for an extended period for some unexpected purpose that could have been achieved a less damaging way.

  • Norman: “Had there been no means of building the system without causing the level of disruption that cut and cover did, the judgment would have been different.”

    Yet there must be reasonable expectations placed on such a stipulation. If tunnel boring turned out to be extremely expensive (but still possible at great expense) due to (say) geological stability, can it be considered an alternate means?

    What scares me is there is room for a government to place arbitrary cost constraints on a project, making alternate non-nuisance forms of construction all but invalid. They in fact did in a round about way, by accepting the lowest bidder in this case. This is important because, if I read the ruling correctly, statutory authority is a defense against nuisance. If statutory authority can be construed to include an arbitrary cost constraint, what then?

    Perhaps Frances can ask a lawyer 😉

  • jimmy olson

    Do i recall incorrectly… but was there not a `plebiscite on having a skytrain route down cambie street?’. .i though after the third try it was passed based on it being a tunnel?

    history:
    https://lists.resist.ca/pipermail/project-x/2003-May/003622.html

  • Rand Chatterjee

    As written by ‘not running for mayor’: The RFPs and RFEOI are still availble for this project for all to see. There was no requirement for a bored tunnel along Cambie, the rfp left that desicion up to the winning bidder. So in that sense there was no switch invovled as a tunnel was never promised.

    Quote from the RFP, Section 3.5.5.1:
    “The Concessionaire will assume all of the risk related to unanticipated geotechnical conditions encountered in the construction of the portion of the Project which is outside of the Main Line tunnel (constructed as a bored or mined tunnel running from Waterfront Station to the southern portal at either 46th or 49th Avenues) (the “Main Line Tunnel”).”
    A “mined tunnel” is defined by the engineering profession as an “underground construction.” This meaning is reinforced by the risk management guidelines of this project that specified tunnelling risk would not be born entirely by the contractor, but open cut construction–falsely called cut-and-cover–would not.

    Do not ever misrepresent what you do not know, and cannot substantiate. You may find that no one will ever listen to you again, or worse, label you as a sycophant or lackey to a gang of bullies and fraudsters.

  • Rand Chatterjee

    Correction to middle paragraph: “but open cut construction–falsely called cut-and-cover–would.”

    The RFP clearly states this in this same section 3.5.5.1: “Open excavations for Stations or portions of the tunnel or other facilities will not
    be considered as part of the Main Line Tunnel.”

    The RFP itself is available from the http://www.doravright.ca web site or from the EAO site.

  • mezzanine

    @ Rand “Do not ever misrepresent what you do not know, and cannot substantiate. You may find that no one will ever listen to you again, or worse, label you as a sycophant or lackey to a gang of bullies and fraudsters.”

    Not running for mayor is correct. There was no promise of a bored tunnel. The Heyes case did not lose due to misrepresentation (ie, ‘bait and switch’). It lost due to ‘nusiance’ which does set a worrisome precident.

    ” There is no evidence to support the allegation that the representation made in mid-2003 with respect to the method of tunnel construction was false or negligent. While that should have been apparent to the plaintiff and its counsel well in advance of trial, the claim in relation
    to that representation was not abandoned until the plaintiff’s closing submissions.”

    http://www.cbc.ca/bc/news/bc-090527-heyes-canada-line-ruling.pdf (page 30)

  • Popco

    Many of the foregoing comments, focusing on the post-construction litigation appear to miss the true nature of P3 infrastructure projects. They are designed to “PICK the PUBLIC POCKET”.
    The risk, in whichever form, ends up being borne by the “public partner” (i.e. Translink pays the Heyes and class-action litigants awards) while the largest cost of the project is paid for by the taxpayer. The kicker for the other “private partner” in this case is the longer-term financial benefit which flows to the concessionaire, Intransit BC ,who are assured (via ridership/revenue guarantees) returns well above a risk-free investment.
    The public finance of goods which end up in private hands should be seen for what it is- the transfer of tax-payers money to private interests.
    The rationale of the federal and provincial governments in choosing this model is symptomatic of a dangerous political convenience. In a democratic society the role of the government is to uphold the rights of the individual. History shows us where the alternative lies.

    “Fascism should more properly be called corporatism because it is the merger of state and corporate power.” — Benito Mussolini

    I believe Justice Pitfield saw this clearly.