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Stigma

Judgment of Tridan Developments Ltd. v. Shell Canada Products Ltd. was rendered on May 9, 2000 and has resulted in new pressure for parties to remediate third party lands that they've contaminated. Th...


Judgment of Tridan Developments Ltd. v. Shell Canada Products Ltd. was rendered on May 9, 2000 and has resulted in new pressure for parties to remediate third party lands that they’ve contaminated. The case has implications for the solid waste management industry, especially landfill owners and operators.

In September 1990, a Shell gas station in Ottawa, Ontario experienced a fuel-line leak and approximately 9,000 litres of gasoline escaped into the soil. Shell took appropriate steps to notify the government, repair the leak and clean up.

“The affected property owner may be entitled to compensation for the stigmam attached to the land on which waste was dumped.”

In August 1991, Tridan, the adjacent property owner to Shell, discovered contamination beneath its property. Tridan sued Shell and sought damages in excess of $1.6-million for remediation, removal of contaminated soil, business interruption, increased mortgage payments, decreased property value and additional costs and inconvenience.

The decision of Justice Binks is notable for two reasons. The first relates to his view as to the extent of remedial work entitled to an affected property owner. The second relates to what some have referred to as “double recovery” for diminution in property value when the full costs of remediation had already been awarded.

Levels of remediation

Tridan submitted to the Court that there were no environment ministry guidelines at the time of the spill and that, even if there had been, the courts have recognized that they merely serve an administrative purpose. As such, they aren’t binding. Tridan submitted that Shell had a common law duty to ensure that its gasoline did not escape and contaminate land and, by failing to do so, Shell had to make good the damage that ensued from the spill.

Tridan took the position that Shell was obliged to pay whatever costs were necessary to clean up its property to a pristine state, which they claimed was the condition that existed before the spill. Tridan also argued that Shell should be required to clean up any residual contamination, at least to current government guideline levels, or put in place a barrier between the two properties.

Shell argued that there was no need to undertake active remediation of the Tridan contaminated lands on the basis that, over time, natural processes would biodegrade the contamination. Shell argued that the contaminated soil was 3-5 metres below ground and didn’t impair the use Tridan made of the land and did not pose a risk to occupants or plant life. Shell also argued that there was no evidence that the property was in pristine condition prior to the spill (and that therefore only the standards at the time of cleanup should apply).

In deciding which level of cleanup was appropriate, a fact that weighed heavily was that Shell had decided to remediate its own property in 1990 when it became aware of the leak. The Court stated that it was inconsistent for Shell to argue that Tridan’s property need not be remediated and that the contamination should be allowed to dissipate over time when it had taken a different approach with its own property. The Court held that since there was no evidence that there was anything wrong with the soil on the Tridan property, there was no evidence to support Shell’s position that Tridan’s land was “anything but pristine” prior to the spill. As such, the Court held that Tridan was entitled to have its property put back to the same condition that existed before the spill (namely, to a pristine state).

Tridan also took the position that there was a decrease in the value of its property as a result of stigma, even after a cleanup. A history of contamination, Tridan argued, makes the property difficult to market. The Court concurred; the value of the stigma was the difference between the value of the property before the spill and after reparation.

Implications

Not surprisingly, the decision is under appeal. The holding that a party whose property has been contaminated by another is entitled to full and complete remediation to a pristine state — not just to accepted government standards — could have a dramatic impact on the efforts which polluters must make to remediate and the certainty associated with such work. To date the commonly held view has been that once remediation is complete, contamination liability ceases. That stigma attaches to a property even after clean up is a new precedent.

This decision has implications for the solid waste industry. The removal of waste may not be sufficient and the affected property owner may be entitled to compensation for the stigma attached to the land on which waste was dumped or underneath which leachate permeated. Landfill operators could be required to remediate to a level beyond that contemplated by applicable guidelines in order to restore any affected property to the condition that existed prior to the contamination.


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