Rainbow

Rainbow

Friday, February 26, 2010

The continuing perils of fuel oil leaks

I don't know if there has been increase in the incidence of fuel oil leaks and spills, but I have noticed a fair number of reported court cases and news stories about the problem in the past year or so. Most often a spill occurs when a fuel oil supplier is delivering oil to a homeowner. I can recall a recent story out of Newfoundland where a fuel supply company pumped oil into an intake pipe at the side of a house only to discover that he was at the wrong house and the intake pipe led directly to the basement (the former oil tank had been removed).

On February 19, the Nova Scotia Supreme Court issued a decision in a case involving a leaking storage tank in a hotel/office building complex - Park Place Centre Limited v. Ultramar Ltd. and G&S Haulage Limited. Ultramar supplied the fuel oil. G&S was hired by Ultramar to deliver the oil. On one delivery date, oil was pumped into the storage tank and leaked out into the building through a breach in the tank. The cost of clean up was more than $300,000.

In the end, liabilty for the main part of the plaintiff's damages claim was apportioned 70%/30% between the two defendants and the plaintiff itself. The Court found that G&S was negligent in
filling the tank without taking proper precautions to ensure that it would not leak. The Court found Ultramar vicariously liable for the damage caused by G&S, since Ultramar owed a duty to the plaintiff to ensure that G&S took reasonable care in delivering the fuel oil. The Court also found that Ultramar had breached an implied term of its contract with the plaintiff, namely that it would deliver fuel oil safely in a manner that would not allow it to escape from the tank.

The plaintiff, Park Place, however, was not without its own responsibility for the spill. The Court found the plaintiff contributorily negligent to the tune of 30% because it had done almost nothing in the years since the tank was installed to ensure that the tank was in proper order and did not ensure that the tank room itself was liquid tight. The Court ruled that an "ordinary, reasonable and prudent operator of a hotel and office complex" would have recognized the importance of ensuring that oil would not escape from the tank room.

Read the decision at:
http://www.canlii.org/en/ns/nssc/doc/2010/2010nssc39/2010nssc39.html