Castledine Gregory Law and Mediation

Supreme Court confirms consultant liable to remediate land

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The Supreme Court of Western Australia in Coffey LPM Pty Ltd v Contaminated Sites Committee [2014] WASC 504  (Coffey v Committee) has confirmed a consultant’s liability to remediate contaminated land. In doing so, the Supreme Court also determined that the Contaminated Sites Committee (Committee), which determines responsibility for the remediation of contaminated sites under the Contaminated Sites Act 2003 (WA) (CS Act), had made an error of law.

 

In a series of decisions made during 2013 and 2014, the Committee determined that the environmental consultancy now known as Coffey was 70% responsible for the remediation of three sites in Osborne Park, being 7 Hutton Street (an operating service station and the Source Site) and two nearby parcels of land (the Affected Sites).

 

Coffey’s predecessor was engaged to undertake an environmental assessment of the Source Site by the outgoing lessee. In the course of undertaking the necessary investigations, an employee (using a hand auger) punctured an underground pipe. According to the Committee, the puncture and Coffey’s failure to respond appropriately to the incident, caused hydrocarbons to contaminate the Source Site. This contamination then migrated to the Affected Sites.

 

Coffey challenged these decisions of the Committee in the Supreme Court in Coffey v Committee. Coffey raised many grounds of appeal, including that the Committee breached procedural fairness, failed to give proper reasons, applied the wrong test and made seriously irrational findings, and failed to take into account a relevant consideration.  All grounds of appeal were rejected by the Supreme Court, save one.

 

The Supreme Court upheld the Committee’s determination that Coffey was liable to remediate contaminated land at the Source Site.  However, the Supreme Court found that the Committee made a legal error when it determined that Coffey was 70% responsible for the remediation of the Affected Sites on the basis of section 27 of the CS Act. In summary, section 27 of the CS Act is only capable of applying to landowners. Coffey is not and was not an owner of any the three sites. As a consequence, section 27 of the CS Act is not applicable to Coffey.

 

The Supreme Court went on to overturn the Committee’s decision to the extent that it related to the Affected Sites and remitted the question as to the responsibility for remediating the Affected Sites for reconsideration by the Committee.

 

Coffey has appealed the Supreme Court decision to the Court of Appeal.

 

What you need to know

 

  • The Supreme Court was not undertaking a review of the merits of the Committee’s decision. Rather, the Supreme Court was only able to consider whether the Committee made an error of law when determining responsibility for the remediation of the three sites.

 

  • Presently there is no mechanism by which persons found to be responsible for remediation by the Committee can seek a review of the merits of that decision. This was considered in a discussion paper released by the Department of Environmental Regulation (DER) in November 2013.  However, the DER has not recommended any changes to the CS Act regarding the scope of appeals.

 

  • As such, despite Coffey’s partial success in this case, it is clear that consultancies are potentially exposed to liability for any pollution caused in the course of investigation works. This puts consultancies in an unenviable position, particularly where they are engaged to investigate a site in circumstances where their instructors provide incorrect or no information as to what may be under the surface. In this regard, we note that Coffey relied on a site map to determine the location of its bore holes on which the punctured pipe did not appear.

 

  • This may lead to consultancies taking a particularly conservative approach when undertaking investigations, which may have implications for the costs, timing and effectiveness of those investigations.

 

  • Liability under the Environmental Protection Act 1986 and the CS Act is ‘strict’. That means it is not necessary to establish intention or even negligence. Rather, all that needs to be established is that the pollution occurred as a consequence of a person’s actions. This confirms the heavy burden on those involved in activities which may cause harm to the environment to ensure that such harm does not occur.

 

  • Consultants’ terms and conditions often seek to limit their liability and this case will likely result in specific limitations regarding contamination caused or exacerbated by investigation works. However, while this may enable the consultancies to make a claim in contract against its principal it does not prevent the Committee from finding it liable for remediation works.

 

The judgment can be found at [2014] WASC 504.

 

For further information or advice on how to respond to this decision in your contracts and practices, contact Sarah Mansfield at Castledine Gregory on (08) 9486 7665 or s.mansfield@cglawmediation.com.au.