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Cable loses $13m bid over gas leak

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Supreme Court yesterday dismissed Cable Bahamas’ bid to obtain a $13 million-plus summary judgment over the Robinson Road gas leak, branding the case as “a complex matter” that needs a full trial.

Justice Rhonda Bain yesterday said there were too “many disputes of fact and law” for her to enter an instant judgment in favour of the BISX-listed communications provider.

She added that the key issue needing to be determined at trial is whether Rubis Bahamas, as the wholesaler, or the gas station operator, Fiorente Management & Investments, a company owned by Harcourt and Bianca Carter, was liable for the alleged gasoline spill.

And, in a seeming reference to the controversy that erupted over the Government’s failure to release timely information to nearby residents on the extent of the gas leak, Justice Bain said an “urgent” trial was required because the issues raised were “of grave public importance”.

Barring the way, though, are other applications by the parties, which include a bid by Rubis Bahamas to ‘strike out’ parts of the evidence presented to the court by Cable Bahamas.

The judgment blocks a ‘quick win’ for Cable Bahamas, which had argued that neither Rubis nor Fiorente Management & Investments had a defence to its “negligence and/or nuisance” claims.

The BISX-listed provider had claimed that the only issue to be determined by the Supreme Court was the amount of damages both, or just one, should pay for loss of its customer service building, associated expenses and impact to employees’ health.

Both Rubis and its gas station operator successfully opposed this argument, but yesterday’s verdict likely only delays - and does not prevent - Cable Bahamas eventually picking up damages, although it now forces the company to go to full trial.

Justice Bain found: “The court holds that this is a complex matter and is not appropriate for summary judgment....

“There are many affidavits filed by the [parties] disputing the facts as alleged. There are many disputes of fact and law - the primary dispute being whether [Rubis] or [Fiorente] is liable for the oil spill as alleged.”

She added: “This is a complex matter that cannot be tried on affidavit evidence alone. The court holds that this is a matter that is not appropriate for summary judgment. This matter should proceed to trial.

“As the issues raised in this matter are of grave public importance, this matter should proceed to trial on an urgent basis.

In its initial claim, Cable Bahamas had alleged that the hazardous vapours from the gasoline leak at the Rubis-branded Robinson Road gas station forced 43 of its staff to seek medical treatment before its former customer service building was closed in late January 2013.

Pointing out that it had been denied use of this building ever since, Cable Bahamas alleged it would cost at least $8.6 million to either clean up the water table pollution or build a new customer service centre elsewhere.

And it is claiming $4.432 million in ‘special damages” to recover the costs, and revenue loss, associated with having to move its customer service operations and marketing arms to the Mall at Marathon and East Street, respectively, as a result of the gas leak.

Justice Bain, in yesterday’s written ruling, noted that Cable Bahamas was claiming it had “suffered intermittent emission of gasoline fumes on to its premises for a number of years”.

This problem, she added, “escalated” in late 2012 as a result of the gas leak that is the focus of Cable Bahamas’ action.

Justice Bain noted the BISX-listed provider’s claim that between 20,000 to 30,000 gallons of gasoline had leaked into the ground and surrounding water table, and were leaching on to its property adjacent to the gas station.

“The plaintiff has alleged that the gasoline leak has endangered the environment, particularly the plaintiff’s land and the supply of ground water thereto,” Justice Bain said of Cable Bahamas’ claim.

“Further, that the gasoline leak has also endangered the health, land and property of residents in the surrounding area.”

Cable Bahamas and its attorneys, Callenders & Co, argued that Rubis and Fiorente “had no reasonable prospect of defending the claim” as its basis for seeking summary judgment.

However, Tribune Business previously reported how Rubis and Fiorente, while opposing the summary judgment bid, were pointing the ‘finger of blame’ at each other for a gasoline leak that has impacted the environment and human health in the surrounding area.

The Government subsequently suggested the leak is nearer 12,000 gallons, and Rubis also claimed that it was much less than the 20,000-30,000 gallons cited by Cable Bahamas. Fiorente, though, backed the latter’s figures in documents filed with the Supreme Court.

Oscar Johnson, representing Rubis, argued that the Supreme Court needed to examine his client’s relationship with Fiorente.

“The court has to determine whether the actual cause of the fuel discharge was as a consequence of acts of omission by the first defendant [Rubis] or the second defendant [Fiorente],” Justice Bain said.

And Dwyan Rodgers, representing Fiorente, said that apart from determining who was liable for the leak, the Supreme Court also needed to assess whether Cable Bahamas “consented to the alleged nuisance by building their office next to the gas station knowing full well of the risk associated with the operation of the gas station”.

Justice Bain concluded: “The dispute between [Rubis] and [Fiorente] with respect to liability for the gasoline leak have shown that this is a strong case for interrogatories, discovery and cross-examination, which will be available if the case goes to trial but which will be struck out if there is a summary judgment.”

Comments

Well_mudda_take_sic 8 years, 2 months ago

The gas or pump station operator is never in substance really the owner of the facility, but rather is in the main or for the most part a mere retail sales agent for the gasoline product it receives from the distributor of the product. This applies even in the case where the real estate on which the gas station sits is owned by the gas station operator. The terms of the various agreements between the gas station operator and the distributor of the gasoline product are such that the former ends up paying to the latter for not only the base cost of the product but also a commission at escalating rates based on the gas station's volume of sales in dollars. The same essentially applies in the case of food and other items sold at the gas station's food mart. What all of this means for the gas station operator (owner) is that its profits are locked into a certain dollar range amount based on sales volume in dollars as opposed to a fixed or increasing percentage of sales bases on sales volume in dollars. The economic difference here is very significant in that it is always the distributor of the product as opposed to the gas station operator who ends up pocketing most (if not all) of the increase in sales volume above a benchmark maximum target amount effectively set by the agreements. The gas stationer operator has little choice but to accept the rigorously standardized and enforced terms of the agreements presented to it by the distributor of the product (in this case Texaco/Rubis). There's never any real negotiating process involved between the gas station operator and the distributor of the product, as the latter is firmly in the driving seat and therefore typically adopts a take it or leave it attitude. No matter how profitable the gas station may become off of the efforts and sweat of its operator, the agreements have the operator locked into a predetermined 'limited maximum' dollar amount that it can pocket with all of the additional profit from the gas station's activities flowing into the pocket of the distributor of the product. In summary, the terms of the standardized agreements governing the relationship between the gas station operator (owner) and the distributor of the product are designed to push nearly all of the business risks the way of the former and nearly all of the rewards the way of the latter. Liability for the matter discussed in the above article seems to properly rest with the distributor of the product as the intended principal and primary beneficiary in a business arrangement with an agent, the gas station operator (owner). If need be, this case should go all the way to the Privy Council.

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Well_mudda_take_sic 8 years, 2 months ago

The relationship of the gas station operator (owner) and the distributor of the gasoline/diesel products is not the same as (or is not similar to) one between a franchisee and franchisor. In a franchisee-franchisor relationship, the franchisee's profits are not locked into a predetermined maximum dollar amount and therefore the franchisee could theoretically received unlimited profits from its sales efforts. The very onerous standardized and rigorously enforced terms of the agreements foisted on the gas station operator by the distributor of the gasoline/diesel products are such that a serious shift or imbalance exists in the risks and rewards assumed by each of these two parties as a result of the business relationship. The gas station operator ends up unfairly assuming unlimited business risks in exchange for a locked in maximum reward (commission income) for its efforts in generating sales whereas the distributor of the gasoline/diesel product ends up unfairly assuming very limited business risks in exchange for paying a predetermined maximum commission expense for the right to receive unlimited rewards (profits) from the efforts of the gas station operator in generating sales of the gasoline/diesel products. The non-negotiability of the key terms of the agreements insisted on by the distributor of the gasoline/diesel products effectively transform the entire business relationship with the gas station operator (owner) to one between a principal and its agent. Under this business model, the liability risks assumed should be commensurate with the upside potential for rewards/profits; in other words, the potential liability risks should properly follow and be fairly aligned with the potential for rewards/profits. It would therefore seem that Rubis/Texaco, as principal in the agency relationship its own business model appears to have unwittingly created with the gas station operator, should bear liability for all claims being asserted in this particular case.

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Reality_Check 8 years, 2 months ago

Ergo, the holding tanks at the gas station are for all intents and purposes an extended part of the distribution system of the distributor of the gasoline product. The technical expertise for maintaining the holding tanks and complying with any relevant safety standards should remain with the distributor of the product which raises a number of interesting questions as to who should properly have the insurable risks associated with the holding tanks.

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sheeprunner12 8 years, 2 months ago

Its called karma ............. Cable Bahamas has stolen enough from Bahamians already (in just bogus late fees alone)

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sansoucireader 8 years, 2 months ago

...and Cable bills set to increase in February 2016.

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birdiestrachan 8 years, 2 months ago

The out spoken QC has lost another case. I hope Cable Bahamas has not paid him to much. Papa sold the cable company to the Canadians . and gave them 15 years to make their money. Now they are all over with their 100% Bahamian owned. and the TV shows leaves much to be desired. and when they find that persons are watching certain shows. they take them off air.and one has to pay if one wishes to watch that show.

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