National Grid Gas Plc, R (on the application of) v The Environment Agency, Court of Appeal - Administrative Court, May 17, 2006, [2006] EWHC 1083 (Admin),[2006] ACD 88,[2006] JPL 1823,[2007] 1 All ER 1163,[2006] Env LR 49,[2006] 1 WLR 3041

Resolution Date:May 17, 2006
Issuing Organization:Administrative Court
Actores:National Grid Gas Plc, R (on the application of) v The Environment Agency

Neutral Citation Number: [2006] EWHC 1083 (Admin)

Case No: 9126/2005




Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 17/05/2006

Before :


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Between :

| |THE QUEEN | |

| |On the application of NATIONAL GRID GAS plc (previously TRANSCO plc) | |

| | |Claimant |

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| |- and - | |

| | | |


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

Nigel Pleming QC and Stephen Tromans (instructed by Nick Webb, Regional Solicitor) for the Defendant

Hearing dates: 6th and 7th March 2006

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Mr Justice Forbes:

  1. Introduction. The Claimant is National Grid Gas plc. However, for convenience, in this judgment I shall refer to it by its previous name, Transco plc (“Transco”), the name used in the relevant documents and correspondence. Transco itself was previously known as British Gas plc, the company which succeeded to the property, rights and liabilities to which the state-owned British Gas Corporation (“BGC”) was entitled or subject upon privatisation under the Gas Act 1986. BGC was itself the product of the Gas Act 1972, which amalgamated the East Midlands Gas Board (“EMGB”) and the other eleven Area Gas Boards that had been created by the Gas Act 1948, the legislation which first nationalised the gas industry in the United Kingdom.

  2. By this claim for judicial review, Transco challenges a decision of the Defendant, the Environment Agency (“the EA”), dated 13th September 2005 and communicated by letter of that date, whereby the EA decided that Transco is an “appropriate person” within Part IIA of the Environmental Protection Act 1990 (“the EPA 1990”) in respect of contaminated land at Bawtry, Doncaster (“the Bawtry site”), on which a gas works formerly stood, but which was subsequently developed for housing from 1966 and now consists of eleven privately owned residential properties with gardens (i.e. the relevant contaminated part of the overall site). The effect of the EA’s decision that Transco is an “appropriate person” is to make Transco liable for a proportion of the costs of remediating the contamination in question.

  3. In summary, the basis upon which the EA has decided that Transco is an “appropriate person” in relation to the Bawtry site is that the contamination was caused by one or more of Transco’s statutory predecessors which operated at the site until 1965, when the site was sold to a company, Kenton Homes Ltd. Those predecessors are: the Bawtry Gas Company (from the 19th Century until 1912); the Bawtry and District Gas Company (from 1912 to 1931); the South Yorkshire and Derbyshire Gas Company (from 1931 until nationalisation in 1948) and the EMGB (from 1948 until the sale of the site in 1965). It appears that the actual production of gas at the site ceased at some point prior to 1952.

  4. On behalf of Transco, Mr Gordon QC stressed the following particular peculiarities of the liability that results from the EA’s decision: (i) that the liability in question is in respect of contaminating substances brought on to the land by one of Transco’s predecessors, not by Transco itself; (ii) that the liability had not accrued at the time of the various relevant transfers (as to which, see below) and (iii) that the liability is imposed under a statutory regime which creates new liabilities, different from those which existed at the time the contaminating substances were brought on to the land.

  5. The remediation work has now been completed. As a gesture of goodwill, Transco’s sister company, National Grid Property Holdings Ltd, provided technical support and assistance to the EA in carrying out the remediation works.

  6. The Issues. Stated shortly, Transco contends that it is not an “appropriate person” under Part IIA of the EPA 1990 and that the EA’s decision to that effect is demonstrably wrong in law for the following three independent reasons (reflecting the particular peculiarities identified in paragraph 4 above):

    (a) Transco did not itself cause or knowingly permit the contamination in question and so cannot be an “appropriate person” within the meaning of section 78F(2) of the EPA 1990 (as to which, see below) – “the Statutory Construction Issue”;

    (b) the evidence does not establish that the conditions for liability under the then applicable legislation were satisfied at the time of the relevant transfers from EMGB to BGC (by the Gas Act 1972) or from BGC to British Gas plc (by the Gas Act 1986); in any event, no such liability had arisen at the time of the transfers in question and thus there was none to be transferred – “the Absence of Liability Issue”; and

    (c) even if there was a liability under any of the then applicable statutory regimes which was transferred under either or both of the Gas Acts 1972 and 1986, those Acts could not operate so as to transfer any liability arising under Part IIA of the EPA 1990, because the 1990 Act imposes a wholly new form of liability and the 1990 Act was not in force at the time of either of the relevant transfers – “the Transfer of Liability Issue”.

  7. It is common ground that the issues raised by Transco’s challenge to the EA’s decision are of considerable general importance in that they affect the operation of Part IIA of the EPA 1990 in relation to many sites which have been contaminated by utility companies or undertakers which have subsequently been subject to statutory re-organisation and transfer of assets and liabilities by way of nationalisation, privatisation or local government reorganisation. For example, as Mr Phillip Kirby for Transco pointed out in his witness statement, the issues concern approximately 2000 gasworks sites, about half of which were not owned by British Gas plc at the time of privatisation.

  8. The Legislative Scheme: Part IIA of the EPA 1990. Part IIA (Contaminated Land) was inserted into the EPA 1990 by section 57 of the Environment Act 1995. In this part of my judgment, all statutory references are to provisions of Part IIA of the EPA 1990 unless expressly stated to be otherwise. Part IIA came into force on 1st April 2000. It provides a detailed framework within which contaminated land is to be identified and “remediated” (i.e. cleaned up). In the ordinary way, the enforcement authority for Part IIA is the local authority for the area where the land is located – in this case Doncaster Metropolitan Borough Council.

  9. However, where certain forms of contamination are concerned, the EA is the enforcing authority. Such sites are known as “special sites”: see section 78C. The Bawtry site is a special site because the contaminating substances involved affect controlled waters and the substances and controlled waters in question fall within regulation 3(c) of the Contaminated Land (England) Regulations 2000.

  10. Section 78B places local authorities under a duty to cause their areas to be inspected from time to time for the purpose of identifying “contaminated land” and deciding whether any land identified as such requires to be designated as a special site. “Contaminated land” for this purpose bears a special meaning under section 78A(2), that is to say land which appears to be in such a condition by reason of substances in, on or under it, that either (a) significant harm is being caused or there is a significant possibility of such harm being caused; or (b) pollution of controlled waters is being, or is likely to be, caused. In deciding what is “significant” in this context, and whether pollution of controlled waters is being or is likely to be caused, the authority must act in accordance with statutory guidance issued by the Secretary of State under section 78YA: see section 78Y(5).

  11. Following identification of the land as “contaminated” (or designation as a special site, if appropriate) the enforcing authority must serve “on each person who is an appropriate person” a notice (known as a “remediation notice”) specifying what that person is to do by way of remediation and the periods within which they are required to carry out the relevant action: see section 78E(1).

  12. Section 78F makes provision for determining who is the appropriate person, as follows:

    “78F Determination of the appropriate person to bear responsibility for remediation

    (1) This section has effect for the purpose of determining who is the appropriate person to bear responsibility for any particular thing which the enforcing authority determines is to be done by way of remediation in any particular case.

    (2) 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, or under that land is an appropriate person.

  13. Ministerial guidance (the “statutory guidance”) in Circular 02/2000, Annex 3, Chapter D, Part 2 refers to persons who...

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