23.11.15. New Zealand’s Supreme Court has given Mobil Oil leave to challenge a Court of Appeal decision that made it liable to pay NZ$10 million to publicly-owned Waterfront Auckland for the clean-up of a heavily contaminated area of Wynyard Quarter in Auckland, according to local media.
Mobil Oil leased two properties in Auckland’s waterfront tank farm for more than 50 years. The land was found to be heavily contaminated after the leases ended in 2011.
Although other oil companies as previous tenants had contributed to the contamination, Waterfront Auckland claimed Mobil had to deliver the land in an uncontaminated condition at the end of its lease term. It took the oil company to the Auckland High Court which found in Mobil’s favour but the Court of Appeal reversed that decision earlier this year.
The Supreme Court said Monday when granting leave to appeal that the approved questions are: whether the “clean and tidy” clauses in the 1985 leases between Mobil Oil and the Auckland Waterfront Development Agency require the oil company to remediate any hydrocarbon contamination of the leased land on termination of the leases and if not, is Mobil Oil liable for the costs of remediation on the basis it breached an implied lease term not to commit waste?
If the answer to either question is yes, the court will then need to rule on whether the remediation obligation relates only to hydrocarbon contamination caused since 1985 or further back to 1925 when the contamination began.