Tridan Developments Limited and Ottawa Motor Sales (1987) Limited, Plaintiffs (Respondents) v. Shell Canada Products Limited and Shell Canada Limited, Defendant (Appellant)

This was an appeal from an assessment of damages. The appeal concerned the measure of damages arising from the decontamination of the respondent’s property by a gasoline spill from the appellant’s neighboring gas station. The appellant stated, inter alia, that the trial judge set too high a standard for remediating the soil, should not have found any residual loss in property value after remediation, and should not have awarded prejudgment interest. Shell had for some years operated a service station in Ottawa adjacent to a car dealership operated by Tridan. In September 1990, 9,000 liters of gasoline leaked from an underground fuel line on Shell’s property. In 1991, Tridan discovered that some of the gasoline had migrated into its soil, forming a plume about 14 feet below grade. Shell accepted responsibility for the required cleanup. Under a new MOE guideline introduced in 1997, called, the “Guideline for Use at Contaminated Sites in Ontario” the level of permissible pollutants varied depending on whether the property was used for agricultural, residential or commercial purposes. The relevant criteria for land used for commercial purposes were set out in Table B. Within Table B, permissible concentration levels varied depending on whether the groundwater was used for drinking purposes and on whether the soil at the contaminated site was fine, medium or course. Lower concentration levels of pollutants were permitted for course grain soil, since pollutants could travel more easily through course soil than fine soil. The court emphasized that no one suggested that the guidelines supplant the common law standard of compensation for injury to land. However, Shell asserted that the MOE guideline represented a reasonable standard to apply to commercial lands that were contaminated but unaffected for the purpose being served. The difference in cost between meeting the 1997 MOE guideline and achieving a site which was clean of all contaminants, referred to as a pristine site, was approximately $250,000, mostly referable to the amount of soil that had to be removed and replaced. The trial judge found that the plaintiffs were entitled to have their property remediated to pristine condition and assessed the cost of doing so at $550,000. Normally the assessment would be as of the date of the injury, but in the circumstances of this case the trial judge chose to assess damages as of the date of trial. None of the parties contested that approach because no work toward reparation had taken place, the business of Tridan had continued throughout and current MOE guidelines were being asserted as the standard. Thus, the court was of the view that it made sense for the trial judge to look to current costing information to arrive at an assessment. It found that the site in question was a commercial property on a busy thoroughfare and unlikely to ever be a site for residential use. It might be concluded that in a practical sense Tridan was not likely to need or want to clean its soil at depth of every particle of pollutant. However, in the circumstances of this case the court did not find that the trial judge erred in deciding that Tridan was entitled to reparation to a pristine state. Where a product that may cause mischief escaped to a neighbor’s property there was responsibility “for all the damage which is the natural consequence of its escape.” (Rylands v. Fletcher, [1861-73] All E.R. 1 at 7 (Ex. Ch.) (H.L.)). Of course, they had to be reasonable. On all the evidence it was fair to conclude that the damages would not be eliminated by reparations to the point of the MOE guidelines. There would be residual loss of value, referred to as stigma, which would be eliminated by remediation to the pristine level. Besides that, the court analyzed the questions related to the remediation of Shell’s own property and the prejudgment interest. In conclusion, appeal was partly allowed and partly dismissed.