Environment—Waste—emediation

House of Lords
Lord Hoffmann, Lord Scott, Lord Walker, Lord Mance and Lord Neuberger
27 June 2007

The phrase a “person…who caused or knowingly permitted” in s 78F of the Environmental Protection Act 1990 (EPA 1990) is not to be construed so as to include every person who becomes by statute the successor to the liabilities of the actual polluters.

Richard Gordon QC, Richard Macrory and Martin Chamberlain (instructed by Pinsent Masons) for the claimant.

Nigel Pleming QC, Stephen Tromans and Rory Dunlop (instructed by the Environment Agency, Warrington) for the defendant.

The proceedings concerned liability for the cost of removing harmful residues of coal tar found beneath the gardens in 11 residential properties in Doncaster (the site). The tar had been deposited by two private companies before nationalisation of the gas industry by the Gas Act 1948 (GA 1948). Section 17(1) of GA 1948 provided that all liabilities which “immediately before” the appointed vesting date would vest in such area board as might be determined by order of the minister. The site passed into the ownership of the East Midlands Gas Board (EMGB) subject to the liabilities of the private companies. The EMGB sold the site to property developers, which built residential properties and sold them into private ownership. By the Gas Act 1972, the area gas boards were abolished and their property, rights, liabilities and obligations were transferred to the British Gas Corporation (BGC). The Gas Act 1986 (GA 1986) privatised the gas industry and led to the formation of the successor company British Gas plc. Section 49 of GA 1986 transferred to British Gas plc BGC’s assets and liabilities. Section 49(1) provided that all liabilities to which BGC was subject immediately before that date became the liabilities of the successor company (British Gas plc). Ultimately the part of the British Gas plc’s undertaking concerned with the storage of gas devolved on the claimant’s predecessor. The defendant agency decided to carry out the remedial works under EPA 1990 and recover its costs from the claimant, which it argued was the “appropriate person” for the purposes of s 78F. The claimant applied for judicial review of that decision. The judge dismissed the application. An appeal was brought to the House of Lords by leapfrog procedure under the Administration of Justice Act 1969.

LORD SCOTT:

Section 78F of Pt IIA of EPA 1990 provided: “(ii) Subject to the following provisions of this section, any person, or any of the persons, who caused or knowingly permitted the substances, or any of the substances, by reason of which the contaminated land in question is such land to be in, on or under that land is an appropriate person. (iii) A person shall only be an appropriate person by virtue of sub-s (2) above in relation to things which are to be done by way of remediation which are to any extent referable to substances which he caused or knowingly permitted to be present in, on or under the contaminated land in question. (iv) If no person has, after reasonable inquiry, been found who is by virtue of sub-s (2) above an appropriate person to bear responsibility for the things which are to be done by way of remediation, the owner or occupier for the time being of the contaminated land in question is an appropriate person. (v) If, in consequence of sub-s (3) above, there are things which are to be done by way of remediation in relation to which no person has, after reasonable inquiry, been found who is an appropriate person by virtue of sub-s (2) above, the owner or occupier for the time being of the contaminated land in question is an appropriate person in relation to those things…”

It was clear that the companies which had deposited the tar would, if they had still been in existence, have been appropriate persons for s 78F purposes. Both were polluters. But both had long since been dissolved. The EMGB, too, a third polluter, would have been an appropriate person, but it was dissolved after the 1986 privatisation of the gas industry. The property developers had also been dissolved. The present owners and occupiers of the 11 residences would be appropriate persons but the defendant had decided not to pursue them. But how could it sensibly be said that the claimant was an appropriate person, it being common ground that the claimant neither caused nor knowingly permitted the coal tar to be buried at the site and that British Gas plc, the claimant’s progenitor, came into existence some 20 years after the site had been sold for housing?

The argument for the defendant was that “person” in s 78F, as in the phrase “person...who caused or knowingly permitted...” should be construed so as to include every person who became by statute the successor to the liabilities of the actual polluters. That was a quite impossible construction to place on the uncomplicated and easily understandable statutory language. The emphasis in s 78F, both in sub-s (2) and in sub-s (3), was on the actual polluter, the person who “...caused or knowingly permitted...”. The suggested construction made nonsense, also, of the language of the statutory provisions under which, upon nationalisation in 1948, the liabilities of the private gas undertakers were transferred to the state owned area boards and, upon privatisation in 1986, the liabilities of the state owned area boards were transferred to British Gas plc. Both in s 17(1) of GA 1948 and in s 49(1) of GA 1986 the assets and liabilities transferred were expressly limited to those existing “immediately before” the transfer date.

The notion that that language could encompass a liability created by Parliament in 1995 by the amendment of EPA 1990 was unarguable. Parliament was, of course, sovereign and could impose what liabilities it saw fit on whom it chose. But very careful statutory language would be needed to impose on a company innocent of any polluting activity a liability to pay for works to remedy pollution caused by others to land it had never owned or had any interest in.

The claimant was not a polluter and was no less innocent of having “caused or knowingly permitted” the pollution than the innocent owner or occupiers of the 11 residences.

The appeal would therefore be allowed.

Lord Hoffmann, Lord Walker, Lord Mance and Lord Neuberger delivered concurring opinions.