Powys County Council v Price & Anor

The meaning of “liabilities” in a statutory transfer provision ordinarily extends to liabilities existing at the transfer date, including contingent liabilities. Clear words are required to transfer a liability created only by a later statutory regime. Part IIA of the Environmental Protection Act 1990 does not deem a predecessor to have been liable before its commencement. A successor is not an “appropriate person” under section 78F(2) merely because it succeeds the body that caused pollution. Ancillary continuity provisions cannot create liability where the principal vesting provision does not. The polluter-pays principle cannot fill a statutory gap. Appeal allowed.

The respondents owned a farm containing a former landfill operated by predecessor local authorities of Powys County Council. Following local government reorganisation, Powys assumed responsibility for the site and later undertook monitoring and mitigation works. It subsequently argued that it was not liable under Part IIA of the Environmental Protection Act 1990, which came into force in Wales after the reorganisation.

The High Court declared that the liabilities transferred to Powys included liability as an appropriate person under section 78F(2): [2016] EWHC 2596 (QB). The appeal concerned whether the succession legislation transferred a liability arising under a statutory regime that was not yet in force, and whether continuity provisions or a transferred tipping licence produced the same result.

Appeal allowed. The declaration that Powys was an appropriate person under Part IIA of the Environmental Protection Act 1990 could not stand.

1. Section 78F(2) and (3) focus on the person who actually caused or knowingly permitted the pollution. They do not include a successor merely because it inherited the predecessor’s property, rights and liabilities. The reasoning in R (National Gas Grid (formerly Transco plc)) v Environment Agency [2007] 1 WLR 318 compelled that conclusion.
2. Part IIA created a present liability for historic conduct when it came into force. It did not create a deemed past liability before commencement. Article 4 of the Local Government Re-organisation (Wales) (Property etc) Order 1996, which transferred all property, rights and liabilities, was not expressed in sufficiently clear terms to transfer liabilities that did not exist at the date of succession and were created later.
3. Contingent liabilities existing at the date of succession may pass under general transfer wording. The cases concerning pre-transfer breaches of existing duties, including Walters v Babergh District Council (1983) 82 LGR 235, were distinguishable. Before Part IIA came into force, Brecknock was under no accrued, contingent or potential liability under that regime. Enactment in 1995 did not amount to commencement in Wales; the court relied on sections 4 and 13 of the Interpretation Act 1978.
4. Section 53(4) of the Local Government (Wales) Act 1994 preserves the continuing effect of predecessor decisions, licences and similar instruments. It does not deem every predecessor act to have been done by the successor. Article 2(7) of the 1996 Order is ancillary and cannot independently transfer a liability which Article 4 does not transfer.
5. The polluter-pays principle could not resolve the statutory question or fill a gap created by the legislative scheme. Any wider extension of responsibility was a matter for Parliament. The court noted, without deciding, that particular licence covenants might themselves have created a contingent liability transferable under the 1996 Order.

1. Court of Appeal (Civil Division): allowed Powys County Council’s appeal on the construction of the succession provisions and Part IIA of the Environmental Protection Act 1990.
2. High Court of Justice, Queen’s Bench Division: granted the respondents a declaration that Powys was an appropriate person under section 78F(2), in proceedings under Part 8 CPR: [2016] EWHC 2596 (QB).