Mobil to pay $10m for tank farm cleanup

Auckland's waterfront 'tank farm' shown in 2010. Photo / Richard Robinson

Publicly-owned Waterfront Auckland has won $10 million from oil giant Mobil for the cleanup of a heavily contaminated area of Wynyard Quarter.

Mobil Oil leased two properties in Auckland's waterfront 'tank farm' for more than 50 years.

When Mobil's lease for the two sites ended in 2011, it was found the land they were on had been heavily contaminated.

While it was established the company was not solely responsible for contamination to the land - other oil companies as previous tenants and neighbouring tenants all contributed too - Waterfront Auckland claimed Mobil had to deliver the land in a completely "uncontaminated condition" at the end of its lease term.

It took the oil company to the High Court at Auckland, where it was decided that if Mobil was liable, it would pay the council-controlled organisation $10 million in damages.

But Justice Sarah Katz in February last year decided that Mobil was not contractually obliged to decontaminate the subsurface of the land.

Waterfront Auckland then challenged the decision and today the Court of Appeal reversed it, awarding a $10 million judgment to the council-controlled organisation.

"We declare that Mobil NZ breached the repair obligation in the 1985 tenancies by failing on termination to remediate hydrocarbon contamination of the land caused by Mobil NZ and its predecessor companies in the Mobil Group since their occupancy began in 1925. The parties having agreed that the cost of such remediation is $10 million, judgment may be entered for that sum," said Justices Ellen France and Forrest Miller.

While Justice Rhys Harrison agreed with his two colleagues to allow the appeal, he had a slightly different take on some of their reasoning. He said he would have remitted the matter back to the High Court for further evidence to determine questions of causation and quantum.

Read the full Court of Appeal decision here: