The operation of the statutory regime built to impose
liability for historic contamination and pollution has received a greater
degree of clarification due to the rulings of a case in the UK High Court; the
case is the first of its kind. In England, Part 2a of the Environmental
Protection Act 1990 (EPA) provides provisions for a statutory scheme purposed
with the goal of determining which party is liable to paying the costs incurred
in the cleaning up of contaminated land. The Waste and Contaminated Land (NI)
Order 1997 lays out a highly similar scheme for this issue in the Northern
Irish legal cannon. The NI scheme has yet to come take effect because it
demands retrospective liability for historic contamination. However its
implications need to be rigorously assessed in anticipation of when it will do
so.
The English case in question concerns a remediation notice
the Environment Agency served with regard to an area situated in St Leonard’s
Court, which lies close to Hatfield. The site in question is a residential
estate in the present day, however it was formerly a chemical works facility
and consequently it stands above a large area of ground water contamination.
This ground water contamination resulted in the closure of a whole roster of
public water facilities as well as the imposition of restrictions on the use of
some others in an area twenty kilometres clear of the site. Redland Minerals
Limited held possession of the site in the early 1980’s. It sold the site to
Crest Nicholson Residential plc. who were responsible for developing the site.
A Key fact to note is that Crest Nicholson was informed of the nature of
contamination of the site prior to purchase. This knowledge was provided both
by Redland itself and as a consequence of inquiries made to the local council
in the same period. The contamination wrought on the site, caused by Bromate
and Bromide, two toxic chemicals, was a fact that Crest was aware of;
consequently the degree of contamination was heightened due to demolition of
parts of the site, as this allowed rainwater to aid the substances permeation
of ground water.
Under part 2a of the EPA a remediation notice was served in
2005 that determined that both Redland and Crest were liable for covering the
significant remediation costs. This notice underwent appeal from both
applicable parties which consequently saw the Secretary of State appoint an
Inspector who dismissed the appeal once the major investigation into the issue
reached its conclusion. Accordingly this dismissal by the Secretary of State
was submitted for judicial review by Redland and Crest. Mr. Justice Sales
decided to dismiss the application for judicial review in February 2010, in the
process validating the primary decision of the inspector.
A key issue that both the Inspector and the High Court
deliberated upon was Redlands scope for liability under the case. According to
Part 2a, a statutory exclusion from liability is applicable in situations where
the seller of a contaminated site has “sold with information”. In its most
broad definition, this provision allows the seller of the site to be excluded
from the provision of any future liability in situations where said seller
provides the purchaser with information on the nature and scope of the site
contamination or permits the purchaser to mount an investigation of its own
into contamination of a site. In this instance complete liability then falls
onto the purchaser of the site. Inserting “sold with information” clauses with
the intention of transferring liability to purchasers or tenants on long lease
of sites has evolved to become standard practice in the property transactions
of contaminated or potentially contaminated land. The application of the “sold
with information” clause led all
adjudicators to conclude that Redlands held partial liability in the case due
to the fact that Crest were only made partially aware of the extent of ground water contamination when
the purchase was conducted. Both the information available and that ascertained
from Crest’s own investigations only established the Bromide contamination.
Additionally Crest was tasked to also take partial responsibility for the
leakage of Bromide into the ground water due to their demolishing of the site
in question. This facilitated the infiltration of Bromide via rain water.
These landmark rulings lead Tughans to the conclusion that
the effectiveness of the “sold with information” clause needs to be
reevaluated. The actuality of the exclusion may be circumstantial. It may
depend upon factors such as the factual circumstances of the transaction in
question, the breadth of knowledge and disclosure by the parties and what said
parties may reasonably be expected to become aware of. Although the St
Leonard’s Court case is one of extremity, it establishes legal principles which
must be taken into evaluation both in future transactions and maybe in those
where the “sold with information” exclusion has traditionally been relied upon.
