ONTARIO, July 8 -- Vale SA's Inco Ltd. must pay C$36 million ($34 million) to Ontario residents near a former refinery, the biggest award in Canadian history in an environmental damages case, according to a lawyer.

Ontario Superior Court Judge Joseph Henderson yesterday found Inco liable for the discharge of nickel emissions from a refinery in Port Colborne, Ontario.

It's the first time outside Quebec that a Canadian court has ordered a company to pay damages for long-term environmental harm, potentially setting a precedent for residents in other communities living near heavy industry, said Eric Gillespie, a lawyer for the Port Colborne residents.

"We're very pleased with this outcome," Gillespie said in a telephone interview yesterday. "It's a proper amount of damages to be awarded."

The group of residents in Port Colborne, Ontario, sued in 2001, claiming their property values didn't rise as rapidly as those in surrounding areas after the provincial Ministry of the Environment said in a report that land near the refinery was polluted, posing a risk to people's health.

The plaintiffs blamed Inco for allowing nickel oxide to be dumped on their properties. Inco operated the nickel refinery in Port Colborne, 145 kilometers (90 miles) south of Toronto on the shore of Lake Erie, between 1918 and 1984.

Vale is reviewing the decision, Cory McPhee, a company spokesman, said in an e-mail.

"Obviously we maintain all legal options, including appeal," McPhee said.

Inco has 30 days to file an appeal.

Household Payments

Henderson divided the damages into three categories, awarding C$9 million to residents of the Rodney Street area in Port Colborne, nearest the refinery. That works out to about C$23,000 per household, Gillespie said.

Residents in the eastern section of the town were awarded C$15 million, or C$7,500 per household, while those in the western part were awarded C$12 million, or C$2,500 per household.

The judge will determine how much law firms representing the residents will get. Gillespie said he expected the legal fees will be several million dollars.

Mostly French-speaking Quebec has laws based on the French system, rather than the British, which is used by the rest of Canada.

The case is Between Ellen Smith and Inco Ltd., 12023/01, Ontario Superior Court of Justice (Welland).