The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian homeowner’s $159,450 damages award over the 2012 fuel leak from Rubis Bahamas’ Robinson Road gas station has been overturned by the highest court in this country’s judicial system which has urged both sides to “cut their losses”.

The London-based Privy Council, while finding that the petroleum products supplier was liable for the 24,000-gallon leak of unleaded fuel, also ruled that both the Supreme Court and Court of Appeal failed to assess the evidence and determine whether Antoinette Russell’s property - located opposite the south-east corner of the Robinson Road and Old Trail Road gas station - was actually impacted by the 2012 leak.

Her home had previously been contaminated by a 1994 gasoline leak from the same service station, but the Court of Appeal had already held that Rubis Bahamas could not be held responsible for that because - at that time - it was owned by Texaco, whose assets Rubis subsequently acquired. And any claim relating to the 1994 leak was time-barred by the Limitations Act, meaning Ms Russell had failed to bring a claim in time.

The Privy Council, though, ultimately ruled that the $159,840 damages awarded to Ms Russell - which represented just 77 percent of the initial $692,825 granted by the Supreme Court - could not stand and ultimately had to be overturned because the two Bahamas-based courts had not distinguished between whether her property had been impacted by the 2012 fuel spill or was still suffering from the 1994 event.

As a result, the Privy Council ruled that the dispute be sent back to the Supreme Court to decide this key issue. And, given that legal costs for doing so will likely exceed the damages that could be awarded, it encouraged both sides to save on expense and end their legal battle.

“The courts below were right to hold that Rubis is liable… for any damage caused to Ms Russell’s property by the 2012 leak. over and above any damage resulting from the 1994 leak,” the London-based court ruled. “But neither court assessed the evidence and made findings of fact based on the evidence about whether any, and if so what, damage was actually caused by the 2012 leak.

“The Board has concluded that the case should be remitted to the Supreme Court to decide that question. That said, the costs of this litigation must already far exceed the maximum amount of damages which could realistically be recovered if the claim succeeds. If the parties are well advised, they will cut their losses at this stage and bring an end to these proceedings by consent rather than incur yet more disproportionate expense.

“If no such voluntary resolution is reached, directions for the new trial of the outstanding issue will need to be given at a case management conference. It will be for the judge dealing with the matter to decide whether the issue should be determined solely on the evidence adduced at the original trial or whether to admit any further evidence bearing in mind that it is now over 13 years since the leak occurred.”

Rubis, according to the Privy Council, had argued that the outcome of the hearing would “have a significant impact on its business and dealings with the wider community in The Bahamas and the Caribbean at large”. It had alleged that the two other courts were wrong to find it was liable for the 2012 leak, arguing that the blame instead lay with the gas station operator, Fiorente Management and Investments, which was its tenant.

And it also argued that the “the storage of petroleum products in underground storage tanks is an ordinary use of land in present-day Nassau in The Bahamas and, for that reason, does not satisfy the requirement of ‘non-natural’ use which is a condition of liability for it to be held financially responsible for the leak. The Privy Council, though, rejected both these arguments.

However, it criticised the trial judge, retired Supreme Court justice, Keith Thompson, for an “inordinate delay” in delivering a 187-page verdict. “Disappointingly, despite its prolixity, the judgment contains hardly any findings of fact or reasons for the decision,” the Privy Council said.

“Much of it comprises documents, including the pleadings and witness statements, which have simply been photocopied and incorporated in the judgment in their original format, together with long passages from law reports and other documents which have been reproduced verbatim. What the judge actually decided is not always clear.” However, then-justice Thompson awarded Ms Russell a total $692,825 covering damages from both the 1994 and 2012 gasoline spills.

The Court of Appeal stripped out the 1994 damages, but found Rubis was liable to compensate Ms Russell for the 2012 leak. “The evidence on this issue came, in the first place, from Ms Russell herself,” the Privy Council found. “She testified that, after the 2012 leak, ‘there was an appreciable difference in the level of fumes in the home. The odour was stronger and much more consistent and persistent’.”

However, the Privy Council said little weight and attention appeared to have been given to the environmental reports and analysis supplied by consultants for the Supreme Court trial. Black & Veatch, which was hired by the then-Bahamas Environmental Science and Technology (BEST) Commission, reported that the area affected by the 2012 leak included the former Cable Bahamas customer service centre and two residential properties on the northern side of Robinson Road.

And the pollution plume “did not extend as far as the Russell property”. Arcadis, the consultant hired by Rubis Bahamas, also found that motor fuel-related chemicals were “either not detected” or “in concentration so low as to be below the reportable limit” in samples taken from Mr Russell’s property. And John Bowleg, the consultant hired by Ms Russell, also obtained similar results to Arcadis.

The Privy Council, though, found the Supreme Court erred when it accepted arguments by Ms Russell’s attorney that the failure by Rubis Bahamas to cross-examine Mr Bowleg on whether the 2012 leak impacted her property meant both the oil company and court “were bound to accept” that it did.

“Mr Bowleg was not asked to express an opinion about whether the minute traces of [chemicals] detected in the sample taken from the Russell property were the result of the 2012 leak or were residues persisting from the contamination caused by the 1994 leak. But in his oral evidence he said that, in the absence of remediation, contaminants will remain in the groundwater and soil for ‘many, many years’,” the Privy Council said.

“The argument advanced by counsel for Ms Russell, which the judge accepted, was misconceived…. It sought to turn a flexible rule based on considerations of procedural fairness into a rigid weapon which can be used to wrongfoot or ambush an opponent who makes a technical misstep…. In this case the trial judge failed altogether to make the required assessment, so that no finding of fact based on evidence was made on the question whether fuel from the 2012 leak migrated to the Russell property.”

This was also missed by the Court of Appeal, and the Privy Council added: “This leaves the Board in the unusual position that neither of the courts below made a factual finding or undertook any evaluation of the evidence on a key factual issue.

“Counsel for Rubis have invited the Board to carry out this exercise itself and to find as a fact that the 2012 leak did not result in the migration of petroleum products to Ms Russell’s property; alternatively, to remit the case to the Court of Appeal with directions for it to consider the migration issue afresh.

“Desirable as it is to bring this long-running litigation to an end as soon as possible, the Board considers that the appropriate tribunal to resolve what is a pure question of fact, if it is necessary to do so, is the court of first instance.”

Finding that Rubis is liable for the 2012 leak, the Privy Council ruled: “What matters is whether or not Rubis was responsible for bringing the fuel which escaped onto the premises and for the conditions under which it was kept there. The Board has no doubt that it was. Two features of the arrangements between Rubis and Fiorente, taken together, lead to that conclusion.

“First, although the fuel stored on the site had been purchased by Fiorente, Rubis (as the lessor) caused the fuel to be brought on to and kept on the land by requiring the premises to be operated as a service station subject to strict operating requirements, and by requiring fuel supplied exclusively by Rubis to be stored, handled and dispensed at the premises.

“Second, although the ‘lessor equipment’ was leased to Fiorente, Rubis provided all the equipment and, under clauses 6 and 17 of the lease, retained the rights to inspect, test, install, repair, replace or remove any of it. Further, pursuant to clause 9(B) of the lease, Rubis was solely responsible for maintaining - other than by carrying out certain routine procedures - and repairing the tanks and other equipment. These arrangements gave Rubis a high degree of control over the integrity of the underground storage systems.”

And the Privy Council also ruled that the storage of petroleum products underground is not a “natural use” of land, adding: “Although storage of large quantities of petroleum products is an ordinary incident of using land as a service station, it is certainly not an activity carried on by a large proportion of persons. It is a specialised and dangerous activity which does not constitute an ‘ordinary’ use of land….

“The risks of harm in the event of leakage are of an entirely different order from the type of inconveniences which those living in the vicinity can reasonably be expected to bear themselves. Leaving nearby residents such as Ms Russell to bear the costs of damage sustained if fuel escapes unless they can prove negligence cannot be justified on the basis of reciprocity or the rule of ‘give and take’ between neighbours.”