An appeals court has upheld an order requiring the Newfoundland and Labrador government to pay a salt and gravel company $10 million for business lost during the construction of the Outer Ring Road in the late 1990s. 1990.
On November 8, Judge Gillian Butler wrote in her decision that City Sand and Gravel Ltd., which operated a quarry near Paradise until 2018, is entitled to compensation.
The problems began in 1994, when a Department of Transport and Public Works commissioned a report concluding that no changes to the company’s drilling and blasting operations would be needed to accommodate the outer ring road and that only closures intermittent roads would be required.
Between 1995 and 1996, the province expropriated the City Sand and Gravel property for the construction of the new highway. At its closest point, the proposed highway was approximately 40 meters from the quarry.
In March 1997, the company expressed concern that the outer ring road would adversely affect its quarry operations and advised departmental counsel that land expropriation could result in a detrimental loss of business.
The department argued that the company would not have to change its drilling and blasting operations.
In 1998, an explosion at the quarry resulted in a “flying rock incident”, with debris landing outside the quarry, damaging a nearby housing estate development. Operations were suspended and did not resume until July 1999.
As the company approached the second phase of quarry operations, approved by the province in 2008, it began to prepare for possible problems with the nearby Outer Ring Road.
City Sand and Gravel hired an outside firm to perform a risk assessment. This company recommended that all development and production blasts within 100 yards of the new highway be covered with rubber blast mats, something City Sand and Gravel had never used before.
The province imposed the conditions in its final approval of the blasting plan in 2011.
The final explosion took place in November 2014. By 2018, existing quarry stocks were exhausted. City Sand and Gravel closed that yeardeciding that it would not be economically feasible to proceed with the second phase under the province’s requirement to use blasting mats, which had nearly tripled the normal cost of quarry operations.
In October 2018, City Sand and Gravel filed an application with the Public Utilities Board asking them to determine the compensation they are owed for their injurious condition claim.
They asked for $10,356,443.92 plus interest and costs and got that decision in April 2021.
The provincial government appealed, arguing that the PUB had “erred in concluding that the expropriation and construction of ORR resulted in an unreasonable interference with the use of the respondents’ lands sufficient to amount to an injurious affection.”
The appeal also disputed the amount of compensation, arguing that the rock remaining in the quarry was valuable, but the company decided not to proceed.
The appeals court decision upheld the finding of unreasonable interference and reduced the original award by just over $109,000, the value of the rock that had been produced in the second phase before the business closure.