Contaminated Land Regime - Courts Make First Decision

The first trial under Part IIA of the Environmental Protection Act 1990, which sets out a statutory regime for contaminated land, took place in June this year. Sevenoaks Magistrates Court found a developer liable for the remediation costs of land purchased and then sold to private residents after redevelopment.

The Circular Facilities (London) Limited v Sevenoaks District Council case shows that developers must ensure that all necessary remediation takes place prior to redevelopment. It also reminds us that the 'polluter pays' principle will not always apply under the Regime and the risk of liability as a 'knowing permitter' of contamination is a real one.

The Regime came into force on 1 April 2000 and introduced retrospective liability for contaminated land. Inevitably, without any court decisions, there has been some uncertainty over how the Regime and the statutory guidance will be applied, particularly who must carry out or pay for remediation of the contamination.

Under the Regime, the enforcing authority must identify the appropriate persons liable to carry out or pay for remediation. In the first instance this is anyone who caused or knowingly permitted contamination to be in, on or under the land (Class A appropriate persons). If no such person can be found, the appropriate person is the owner or occupier of the land (Class B appropriate persons).

Where there is more than one Class A appropriate person, a series of six exclusion tests apply in strict order to see if any person is excluded from liability. The sixth exclusion test excludes from liability any Class A appropriate person who would be liable solely because someone else has subsequently introduced 'a relevant pathway' (a means by which contamination can travel to a receptor) or receptor (including human beings and property, including buildings). This test only applies where development or change of use has occurred on the land.

In the Circular Facilities case, clay pits had been dug on the site of a former brickworks. During the 1960's and 1970's, while Mr Kinchen-Goldsmith and then Mr and Mrs Scott owned the land, the clay pits were landfilled with a variety of wastes, including organic wastes.

Mr and Mrs Scott sold the land to Circular Facilities in December 1979. Mr Scott and Circular Facilities entered into an informal arrangement under which Mr Scott was responsible for redeveloping the site. Contaminated Land Regime - Courts Make First DecisionWorking under the informal arrangement and with the architect employed by Circular Facilities, Mr Scott obtained planning permission on behalf of Circular Facilities to build eight houses on the site.

A 1978 geotechnical report on the site was given to Sevenoaks District Council in March 1980, to support the planning application. The report indicated the presence of black organic matter on the site and gases bubbling through water in trial pits. The report was placed on the planning register and was therefore available to Circular Facilities and its advisers. No measures were taken to remove or contain the organic waste when the houses were built.

In the 1990's the Council identified that the former clay pits were emitting significant quantities of landfill gases and installed gas protection measures in the houses at its own cost. After the Regime came into force, the Council appointed an environmental consultant to assess whether the contamination was serious enough to fall within the Regime. Following the assessment, the Council concluded that landfill gases were giving rise to an imminent danger of ‘significant harm' to the health of the occupants. The Council, therefore, formally identified the site as contaminated land and in November 2000 served a remediation notice on Circular Facilities, on the basis that it was a 'knowing permitter'. This notice required Circular Facilities, to take further measures to vent the landfill gases and aerate the soil.

Circular Facilities appealed against the remediation notice, which was suspended pending the appeal. The Council then used its powers to take emergency remediation action where there is an imminent danger of serious harm.

Circular Facilities' first argument was that the Court could not affirm the remediation notice, arguing that it had been made redundant because the Council had already carried out the work under its emergency powers. The Court dismissed this argument, saying that the Regime and planning guidance contemplates this situation and that determining the appeal on the remediation notice would establish liability for costs incurred by the Council.

Circular Facilities’ second ground of appeal was that it had been unreasonably determined as an 'appropriate person'. Circular Facilities argued that the persons who allowed the infilling should have been designated as appropriate persons, that it was not aware of the presence of the organic waste and had relied on Mr Scott to develop the site. The Court did not accept this argument and said that Circular Facilities must have considered the report and therefore must have had knowledge of its contents. The geotechnical report was submitted on behalf of Circular Facilities and had identified organic matter in the ground and gas bubbles rising through water in trial pits. The Court went on to state that Circular Facilities could have investigated the risk and taken measures to remove it. Circular Facilities' failure to deal with the landfill gases meant that it had knowingly permitted their presence. It was not necessary for a person to have introduced, or knowingly permitted the entry of the contaminants, knowingly permitting their continued presence was sufficient.

Applying the sixth exclusion test, the Court held that Circular Facilities had introduced the pathways (the housing development) and the receptors (the householders) thereby creating risk from landfill gases. The Court therefore decided that both the Scotts and Mr Kinchen-Goldsmith should be excluded from liability. The Court dismissed Circular Facilities' appeal and held that the Council had correctly served the remediation notice on Circular Facilities alone.

This case represents a significant step in the development of the Regime and provides useful guidance on the approach the courts will take. The statutory guidance and exclusion tests are likely to be followed strictly and the term 'knowingly permitted' given a relatively broad interpretation. It is not necessary for a person to have introduced contaminants to be found liable as a Class A appropriate person. Liability can fall on persons who knowingly permit the continued presence of contaminants, even if they do not have detailed knowledge of them.

Although the Regime is intended to address more serious contamination cases, this case concerned the presence of seemingly benign organic matter under land that nevertheless was found to have serious consequences for the people living there. Indeed, land that has not seen industrial use or landfill has been designated as contaminated under the Regime, including domestic heating oil tanks, back-street door stripping works and farm waste deposits. Assumptions should not be made as to whether sites are likely to be contaminated and redevelopment under the planning system may not necessarily confer immunity from designation under the Regime, particularly where the redevelopment took place some time ago when remediation standards were not perhaps as strict.

Overall, there are still relatively few sites that have been designated as contaminated land and many will be dealt with by voluntary remediation. However, pressure is building for greater enforcement. DEFRA and the Environment Agency see a need to increase action under the Regime and sites that have been investigated but not yet subject to active enforcement are likely to be targeted.