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Case Summary: Tridan Developments Ltd. v. Shell Canada Products Ltd.

In Tridan Developments Ltd. v. Shell Canada Products Ltd., 2002, CanLII 20789 (ON C.A.), the Court dealt with an appeal from an assessment of damages arising from the contamination of the respondent's Tridan Developments Ltd. property by a gasoline spill from the appellant's Shell Canada Products Ltd. neighbouring gas station.

The trial judge assessed the damages and granted judgment against Shell Canada Products Ltd., amongst other things, as follows:

  1. $550,000 for costs of remediation,
  2. $350,000 for loss of property value due to stigma associated with contamination.

The crux of the appellant's submission is that the trial judge set too high a standard for remediating soil and should not have found any residual loss in property value after remediation.

The Court of Appeal agreed with the trial judge's findings that the contaminated property was a commercial property on a busy thoroughfare and that was unlikely that it would ever be a site for residential use. It further stated that it might be conclude that in practical sense Tridan Developments Ltd. was not likely to need or want to clean its soil at depth of every particle of pollutant. However, stated the Court, in the circumstances of this case it could not be said that the trial judge erred in deciding that Tridan Developments Ltd. was entitled to reparation to a pristine state. The Court stated that where a product that may cause mischief escapes to a neighbour's property there is responsibility "for all the damage which is the natural consequence of its escape." Of course, these damages must be reasonable. The Court stated that on all the evidence it was fair to conclude that the damages would not be eliminated by reparations to the point of the Ministry of Environment guidelines. There would be residual loss of value, referred to as stigma, which would be reduced, as the trial judge found, or eliminated, by remediation to the pristine level.

Nonetheless, an analysis of all the evidence led the Court to the inference that there was no support for the trial judge's conclusion that there was a residual reduction of value in a pristine site caused by the knowledge that it was once polluted. 

The relevant expert evidence at trial did not suggest that stigma would attach to a site cleaned to pristine condition. Indeed, this evidence made no mention of a pristine site and made equal sense if it is assumed that the evidence was referring to a cleanup to Ministry of Environment standards.

In sum, the Court concluded, the evidence compelled it to conclude that there was no stigma loss at the pristine cleanup level. This conclusion also made sense of the trial judge's holding that cleanup to the pristine standard was justified in this case. If the trial judge's assessment of stigma damage at $350,000 was taken as the diminution in value at cleanup to the guideline standard, then the more economical route was to proceed to the pristine level at an additional cleanup cost of $250,000 with no stigma damage.

In Court's view, the only reasonable conclusion from the totality of the evidence was that a pristine site had no residual loss of value and that paragraph 1 of the judgment was amended to reduce the amount awarded by $350,000.


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