Published: 26 April 2017
Area of Law: Planning, Real Estate
Turning a blind eye to contamination could be a toxic move for developers
The Secretary of State has granted an appeal by Jim 2 Limited and quashed a notice served by Walsall Metropolitan Borough Council in an important decision relating to the contaminated land regime.
As there are very few decided cases in this area of the law, the decision will be of major interest to practitioners, developers and landowners alike. And, failing to evaluate the past and present environmental usage of land could leave developers and owners open to costly liability claims, says Ian Graves, planning specialist.
About the case
For practitioners, this appeal represents a rare and valuable opportunity to see the approach that Planning Inspectors and the Secretary of State will take to appeals under Part IIA of the Environmental Protection Act 1990. For developers and landowners, however, what is likely to be of greater interest is an issue that was determined in the Council’s favour, even though it lost the appeal overall.
The Secretary of State held that Jim 2 had knowingly permitted contamination to be present on parts of the Stonegate Housing Estate, even though it was not the original polluter. As Jim 2 was one of the developers that built the Estate, it is likely to have been aware of the presence of waste products on the land resulting from the operation of the former Willenhall Town Gas Works such as coal tar and hydrocarbons.
The Secretary of State’s view was that it was only necessary for Jim 2 to have known of the presence of the substances and not of their harmful effects. As well as having the relevant knowledge, the Secretary of State decided that Jim 2 had a reasonable opportunity to remediate the land during its period of ownership, but did not do so.
The Secretary of State also appears to have accepted (following the reasoning of an Inspector in the earlier St Leonard’s Court appeal) that a developer carrying out works on the land that exacerbate the pollution, for example by spreading the pollutant around or exposing it to rainfall during construction, could be regarded as having actively caused the pollution. On the facts, however, the Secretary of State decided it was unlikely that Jim 2 had done this.
Advice for landowners and developers
Developers and landowners must be aware that they cannot turn a blind eye to possible contamination on land that they own or develop.
If they are aware of the presence of substances that later turn out to be harmful, but do not remediate them, they could become a responsible person under Part IIA as a “knowing permitter” even though they are not responsible for the introduction of the substances to the land.
Equally, if contamination is not fully remediated, or is made worse by constructions works on the land, then a developer may be held to have “caused” the pollution. Landowners already know that they bear ultimate responsibility where the original polluters cannot be found, but this case shows that there may be circumstances in which a landowner can be held partially responsible even where the polluter is still in existence.
Getting it wrong can be costly
Clean-up costs in the Stonegate case have been reported as around £2.5m, demonstrating that the price of liability can be huge. This highlights the importance of a thorough consideration of environmental matters prior to the purchase of land, whether that is for development or investment purposes.
The Secretary of State did conclude that there was a clear case for the existence of contamination due to the presence of a harmful substance called benzo(a)pyrene in the ground. However, Jim 2’s appeal was ultimately successful due to deficiencies in the Council’s technical evidence and a failure by the Council to follow statutory guidance.
The Inspector’s report and other supporting documents in the appeal can be viewed here. The Secretary of State’s decision letter is available here.