Oil Spill Liability - Kawartha Lakes Continues

Background

In the most recent decision in the ongoing Kawartha Lakes saga,1 the Superior Court of Justice found homeowner Mr. Wayne Gendron partly responsible for an oil spill that destroyed his lakeside property. The Court also found Mr. Gendron's fuel distributor liable for a portion of the costs.

This decision serves to warn homeowners that a distributor's delivery of fuel does not mean that their tanks are safe. It also cautions fuel distributors that they may be liable for spills brought about by a homeowner's negligence.

The Facts

Thompson Fuels ("Thompson") supplied 700 liters of fuel oil to two tanks in Mr. Gendron's basement. Mr. Gendron had installed the fuel tanks himself without proper shut off valves, contrary to industry standards.

During a period of financial difficulty, Mr. Gendron filled these fuel tanks with less expensive stove oil. The stove oil introduced water and microbes into the tanks, causing the tanks to corrode.2 When Thomspon delivered the fuel oil one of the tanks leaked, spilling approximately 600 liters.

In the hours following the fuel delivery Mr. Gendron tried to manage the spill on his own by collecting what he believed to be all of the leaking oil in Tupperware containers. Approximately 24 hours later, Mr. Gendron called Thompson to complain that it had not delivered his entire shipment of fuel oil - he was short about 600 liters. Mr. Gendron never called to report the spill to the MOECC's Spills Action Centre hotline.3

The fuel oil migrated under Mr. Gendron's house, through the City of Kawartha Lake's drainage system, and into nearby Sturgeon Lake. The MOECC ordered Mr. Gendron and his wife to "ameliorate the adverse effects caused by the discharge of the furnace oil" and "restore the natural environment... to the extent practicable."4 Mr. Gendron began remediation of the contamination of his property and the contamination of Sturgeon Lake.

Early remediation efforts were complicated by the frozen lake and soil. Mr. Gendron's personal insurance was rapidly exhausted. His insurer eventually refused to fund further off-site remediation of Sturgeon Lake.

The remediation efforts cost nearly $2M and required the demolition of Mr. Gendron's home.

The City's MOECC Order

The MOECC ordered the City of Kawartha Lakes to clean up any fuel oil remaining in the City's culverts and sewers that could recontaminate Sturgeon Lake. The City appealed the order first to the Environmental Review Tribunal, then to the...