ENVIRONMENT — Protection — Contaminated land — Contamination of land by operation of gasworks — Contamination caused or knowingly permitted by claimant's statutory predecessors — Whether claimant as successor in title liable for remediation of contaminated land — Whether “appropriate person” — Environmental Protection Act 1990, s 78F (as inserted by Environment Act 1995, s 57)

R (National Grid Gas plc) v Environment Agency

HL (Lord Hoffmann, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Mance and Lord Neuberger of Abbotsbury): 27 June 2007

A private company which had taken over the assets and liabilities of the state-owned British Gas Corporation in 1986 was not liable under legislation enacted in 1995 for the cost of removing contamination from land at a former gasworks which had been sold for housing in 1965.

The House of Lords so held in allowing an appeal by National Grid Gas plc, a successor company to the privatised British Gas plc, from the order of Forbes J [2006] 1 WLR 3041 dismissing its claim for an order to quash the Environment Agency's decision that National Grid Gas was an appropriate person within Part IIA of the Environmental Protection Act 1990 in respect of contaminated land at Bawtry, Doncaster. The contamination had been caused by a private gas undertaker depositing coal tar underground between 1915 and 1948. Part IIA provided for the remediation of contaminated land by an “appropriate person”, defined in s 78F of Part IIA as the person “who caused or knowingly permitted” the contaminated substances to be on the land.

LORD SCOTT said that the term “appropriate person” in s 78F referred to the person who had caused or knowingly permitted the relevant contamination and not a successor to the business of that person. Although, by s 17(1) of the Gas Act 1948 and s 49(1) of the Gas Act 1986, the liabilities of private gas undertakers had been transferred to the state-owned area boards at nationalisation in 1948 and the liabilities of those boards had been transferred to British Gas plc upon privatisation, in each case the assets and liabilities transferred were expressly limited to those existing “immediately before” the transfer date. They did not encompass a liability created in 1995 by the amendment of the 1990 Act to remedy pollution caused by those predecessors. The decision that National Grid Gas was an appropriate person would be quashed

LORD HOFFMANN and LORD NEUBERGER delivered concurring opinions and LORD WALKER and LORD MANCE agreed.

Appearances: Richard Gordon QC, Richard MacRory and Martin Chamberlain (Pinsent Masons) for National Grid Gas; Nigel Pleming QC, Stephen Tromans and Rory Dunlop (Regional Solicitor, Environment Agency, Warrington) for the agency.

Reported by: C T Beresford, barrister