ENVIRONMENT & PLANNING Alert: What you don’t know CAN hurt you!

28 January 2016


Did you know that, in Victoria you can be liable for the cost of cleaning up pollution even though the pollution occurred many decades ago and even though you had no knowledge of the pollution at the time you sold the land? That liability extends to any future owner, not just the party to whom you sold it.

On a more positive note, an occupier of land who has paid the costs of a clean up can seek recovery of those costs from the party responsible for the pollution even though the pollution occurred many decades ago.

The Facts

On Christmas Eve 2015 the Supreme Court of Victoria held the Yarra City Council (Yarra) liable under section 62A(2) of the Victorian Environment Protection Act 1970 (EP Act) for the cost of cleaning up pollution caused by the operation of a tar distillery between 55 and 100 years ago. For the first time a court has articulated what must be satisfied to show that a person has ‘appeared to abandon’ waste or a hazardous substance (Metropolitan Fire and Emergency Services Board v Yarra City Council & Ors [2015] VSC 773).

Thomson Geer acted for the successful plaintiff in the matter.

In 2005 whilst building a community safety and training facility on land purchased from the Victorian State Government, the MFESB unearthed a bluestone pit containing coal tar and other pollution. The main issues in the case were whether the bluestone pit was a tar storage tank from a tar distillery operated by the Richmond City Council (now the Yarra City Council) from about 1916 to 1959 and consequently whether Yarra was liable for the cost of complying with an EPA clean-up notice issued to MFESB.

The court held that Yarra is liable for the costs incurred in cleaning up the pollution (at this stage estimated at being in excess of $10 million, plus costs and interest) and confirmed that inchoate liabilities of former councils passed to the newly formed councils upon amalgamation. The court found that Yarra had caused the pollution but also, for the first time, set out the law on when a person ‘appears to abandon’ industrial waste or a hazardous substance. The court found that the subjective intention of the person abandoning the material was not relevant and that Yarra was liable even though it was not aware of the pollution and there was no visible sign of its existence at the time Yarra left the site.

Yarra argued that the application of section 62A did not operate retrospectively and they were not liable to pay for cleaning up the remnants of what was a lawful activity at the time. This argument was rejected, the court finding that a new liability was created as a result of the EPA issuing a clean up notice. The court considered that it was fair and consistent with the intention of the EP Act that polluters pay the cost of cleaning up their pollution.

The take away point is that section 62A(2) applies even where the pollution was caused prior to the commencement of the EP Act and it does not matter whether the activity that caused the pollution was lawful at the time or whether the polluter was aware of the pollution that they had caused or abandoned.

Important implications

As more former industrial land is developed for other uses, this case is an important reminder of the continuing liability that exists in Victoria for historic pollution even where the polluter is not aware that they have caused or failed to remediate pollution when they have left or sold a site. That liability continues even when the land has been sold and the polluter has no relationship with the current owner or occupier of the land.

For those who own polluted land and who were not responsible for the pollution, the case demonstrates that there is potentially a very effective means for you to recover the costs of cleaning it up where a clean-up notice is issued. 

Please note that this is a Victorian case affecting only properties located in Victoria.  You should check the relevant laws or seek legal advice for any properties you own in other States and Territories of Australia.

Written by:

Henrik Lassen | Partner – Dispute Resolution | +61 3 9641 8631 | hlassen@tglaw.com.au
Vicki Sharp | Partner – Property | +61 3 9641 8668 | vsharp@tglaw.com.au

Amanda Johns | Partner – Environment & Planning | +61 3 9641 8631 | ajohns@tglaw.com.au

Tom Warne-Smith | Lawyer | +61 3 9641 8714 | twarne-smith@tglaw.com.au