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Fuel Oil Foul-up
Published in the February 2008 issue of Litigation Notes - View Article
Summary: Heating contractor converted heating system from oil to gas and left oil fill pipe in place, although it should have been clear that it should not be used. Fuel oil supplier mistakenly pumped oil into the house, causing spill and expensive environmental remediation. Analysis of whether contractor was liable to the fuel oil supplier.
In 1979, the Bingleys, of Smith Falls, Ontario, decided to convert their heating system from oil to natural gas. The work was performed by Stanzel Plumbing (“Stanzel”). Stanzel removed the furnace, but the oil tank was left in place. On the exterior wall of the home, the fill pipe and the vent pipe were also left in place. On the fill pipe, Stanzel tightened the cap so that it could not be removed by hand and turned the pipe down towards the ground, to make it evident that it should not used.
22 years later, in March of 2001, John McDougall was delivering fuel oil for Morrison Fuels. He had been working for Morrison Fuels for two months. He was on Russell Street and he was in a hurry. He grabbed a delivery ticket and thought that the address said 38 Russell Street, when in fact it said 38 William Street.
He proceeded to 38 RussellStreet, which was the Bingley’s residence. There, he found the fill pipe turned down towards the ground and the cap fastened tightly. Rather than inquire as to the significance of this state of affairs, he retrieved a wrench from his truck and with considerable difficulty managed to remove the cap and to twist the pipe into a more upright position. He then proceeded to pump 933 litres of furnace oil into the house.
There were in fact other indicators that might have alerted him to the fact that he was at the wrong residence. The ticket for the correct residence showed the fill pipe being at a different corner of the house than where he found it at the Bingley’s. In addition, it also indicated that he was only expected to deliver 560 litres.
The fill pipe at the Bingley’s was still connected to the fuel tank in their basement. Unfortunately, it had leaks. Oil escaped from the tank and leaked onto their basement floor which consisted of bedrock with vertical and horizontal soil seams. The oil escaped into the soil and ground water, leading to an environmental remediation which was ongoing at the time of this court decision but to that point had cost $767,000.
Morrison Fuels admitted liability to the home-owners, but claimed indemnity from Stanzel . In 1979, Stanzel was governed by an Ontario Regulation which provided in part:
“When an installation of an appliance constitutes a conversion from another form of energy…it shall be the responsibility of the installer to ensure that the means of supply of the other form of energy has either been removed or left safe and secure from accidental discharge.”
This provision was changed in 1982 to require removal of the fill pipes and vent pipes attached to the exterior of the house. However, in 2001 it was still common-place for fill pipes to be in the configuration used by Stanzel, as a result of conversions pre-dating the 1982 change.
The Court began by considering whether or not Stanzel met the standard of care that it owed to the Bingleys when it decommissioned their furnace in 1979. The Court quoted from the case of Ryan v. Victoria (City) [1999] 1 S.C.R. 201, where the Supreme Court of Canada stated:
“Conduct is negligent if it creates an objectively unreasonable risk of harm. To avoid liability, a person must exercise the standard of care that would be expected of an ordinary, reasonable and prudent person in the same circumstances. The measure of what is reasonable depends on the facts of each case, including the likelihood of a known or foreseeable harm, the gravity of that harm, and the burden or cost which would be incurred to prevent the injury. In addition, one may look to external indicators of reasonable conduct, such as custom, industry practice, and statutory or regulatory standards.”
The Court went on to point out that compliance with statutory requirements is not a defence if compliance with the standard is objectively unreasonable or dangerous. However, in this case the Court felt that Stanzel had met the relevant standard applicable in 1979. While everyone agreed that it would have been preferable to have removed the fill pipe and vent pipe altogether, the method used by Stanzel was sufficient to render the appliance “safe and secure from accidental discharge”.
The Court went on to say that Stanzel did not owe any duty of care to Morrison Fuels “…or to any other furnace oil delivery company, to save them from making an egregious mistake in the face of all indications to the contrary and delivering furnace oil to a place with no oil furnace”. However, the Court went on to say that if it should be found that its decision was wrong and that Stanzel should have removed or permanently plugged the oil fill pipe as part of its conversion work for the homeowners because it created a reasonably foreseeable risk that there could be a delivery of furnace oil into that fill pipe, the Court assessed Stanzel’s negligence at 5%, Morrison Fuels’ at 20% and John McDougall ‘s at 75%.
Bingley v. 503373 Ontario Limited (Morrison Fuels), 2008 CanLII 5958