Ontario Superior Court Justice MacKenzie has rendered his decision in the civil lawsuit between the City of Guelph and waste treatment technology company SUBBOR (which stands for Super Blue Box Recycling). Justice MacKenzies 90-plus page decision in the matter of The Corporation of the City of Guelph v. Super Blue Box finds almost entirely in favor of Guelph and dismisses SUBBORs $32-mllion claim, and awards damages in favor of the city.
The judgment — dated August 10 — requires the company to pay the city’s legal costs, which amount to more than $4.5 million — though it’s unlikely the company will have to pay the full amount.
SUBBOR must also remove all of its property from the land leased to it by the city for a demonstration facility, and return the land to the condition that existed before SUBBOR set up its operations.
SUBBOR was a company established by Greg and Hubert Vogt, whose other company — Eastern Power — built a plant that successfully generates electricity from methane captured at the site of Torontos former Keele Valley Landfill. The concept with SUBBOR was to take unsorted garbage and process it through an anaerobic digestion system and generate clean electricity, recyclables and peat. The process incorporated a novel heat treatment unit that used controlled explosions of steam to break down waste material.
SUBBOR had never demonstrated its process at a municipal scale and the arrangement with the City of Guelph deal was meant to facilitate this. However, the city claimed that the process was never successfully demonstrated and the relationship between the municipality and the company deteriorated.
After the city stopped working with the company and discussions with a mediator failed, SUBBOR sued the city for breach of contract, seeking $32 million in damages. SUBBOR alleged the city had acted in bad faith, had interfered with Guelph Hydro connecting a power line to the site, and unreasonably charged the company development charges for the construction of its facility and for accepting waste from other municipalities.
In his decision, Justice MacKenzie rejected SUBBORs arguments and found in favor of the city on every major point. Beyond the strict legal issues, the judges findings describe a relationship that was dysfunctional almost from the start. The document will likely be a useful roadmap for other municipalities and entrepreneurs about what to do (and not do) when entering into partnerships to demonstrate waste treatment and disposal technologies.
Central to his findings was that it would have taken the company longer (if ever) than the term of the contract with Guelph to prove its technology worked on a commercial large scale. Her decision refers to instances of waste material plugging up the equipment, and failure of the heat treatment unit — which was central to the process — to function as anticipated.
The trial was held in the autumn and early winter of 2005. The city spent $4.5 million in legal fees and the price to hire experts to testify on behalf of the city. Even though the judgment favors the city, it will probably have to pick up part of the tab; the size of costs rewarded to the city has yet to be determined by the court.
SUBBOR has 30 days to file an appeal.
Note: The October/November edition of Solid Waste & Recycling magazine will feature an in-depth article on the decision in the court case between the City of Guelph and SUBBOR, to provide useful information to municipal managers and technology developers contemplating future partnerships.
A copy of the judges decision may be found under the Posted Documents button on the home page at www.solidwastemag.com