HG Environment Alert: Coffey reheated: Contaminated Sites Committee decision remitted by WA Supreme Court – 5 February 2015

In 2013 and 2014 the Contaminated Sites Committee (Committee) found Coffey PM Pty Ltd (Coffey) 70% responsible for remediating a contaminated source site and two affected sites.  Coffey appealed the Committee’s findings to the Supreme Court.

In this Alert, Associate Kylie Panckhurst provides an overview of the Supreme Court’s decision and, in particular, the Court’s comments on the correct statutory tests for determining responsibility for remediation under the Contaminated Sites Act 2003 (Act).

Key points

  • There are different statutory tests for determining a party’s responsibility for contamination remediation depending on the party’s relationship to the site.
  • Section 25 of the Act deals with the responsibility for remediation of a person who caused or contributed to contamination.
  • Section 27 of the Act applies to land-owners only. While section 27 allows for a land-owner of the source site to be responsible for sites which the contamination has migrated to in certain circumstances, this mechanism does not extend to other parties.
  • Disputes regarding responsibility for contamination are often protracted and costly.  It is important to identify parties’ legal rights and responsibilities and prudently manage the issues from the earliest stage possible.

Background facts

A full summary of facts can be located in the 2013 Supreme Court decision (Coffey LPM Pty Ltd v Contaminated Sites Committee (No 2) [2013] WASC 98) but in brief:

  • Coffey is the current owner of an environmental consultancy business, formerly known as MPL Group Pty LTD (MPL).
  • The Osborne Park site (source site) had been used as a petrol station since 1973. 
  • Between 1999 and 2004, Wesfarmer Kleenheat Gas Pty Ltd (WKG) leased the source site from WA Seafood Exporters Pty Ltd (WASE).  At all relevant times WASE owned the source site.
  • The lease agreement between the WKG and WASE required WKG to provide an environmental assessment before vacating the lease.  This assessment was carried out after WKG vacated the site with MPL conducting soil and ground water analysis in August 2004.  
  • On 17 August 2004, it is alleged that an MPL employee damaged an underground remote fuel fill pipe with a soil auger, creating a hole in the pipe. 
  • Various investigations in 2004 and 2005 revealed contamination of groundwater at the site and led to the identification of the hole in the fill pipe. The hole was repaired in April 2005.
  • The contamination migrated from the source site onto another property and a road reserve (the affected sites).

Committee decisions

The Committee’s first decision on 27 August 2013 related to the source site.  The Committee found Coffey responsible for 70% of the overall remediation responsibility on the basis that much of the overall responsibility arose from the act of damaging the fill pipe and, to a lesser extent, from the act of failing to notify WKA or WASE of the suspected contact with the pipe during the site investigation.   WKG was attributed with the 15% responsibility on the basis that WKG failed to notify relevant parties of the possibility that damage had occurred, or that contamination had been found at the site after MPL notified it of contamination in 18 October 2014. The remaining 15% of the total responsibility was attributed to WASE on the basis that the continuing use of the underground pipe, while damaged, was the act that caused pollution to occur and was committed without authority.[1]

The Committee’s second and third decisions on 5 March 2014 determined responsibility for remediation of the affected sites.  The same parties were found responsible, in the same proportions, as for the source site.

Supreme Court appeal

Grounds of appeal – source site

Coffey’s grounds of appeal for the source site were based on four questions regarding whether the Committee had:

  • erred in law in finding that MPL had punctured the fill pipe;
  • erred in law in finding that MPL had committed the offence of ‘causing pollution’ contrary to section 49(3) of the Environmental Protection Act 1986 (WA) (EPA);
  • erred in law in finding that MPL had ‘allowed’ pollution to be caused contrary to section 49(3) of the EPA; and
  • misconstrued or misapplied section 25(3) of the Act.[2]

The Court noted that the four questions were said to involve approximately 80 errors of law categorised in twelve categories identified by Coffey.[3]   The Court noted that the categorisation did not make it easy to deal with the issues in the case and did not succeed in avoiding the criticism made in BP Australia Pty Ltd v Contaminated Sites Committee regarding prolix, repetitive and confused grounds of appeal which fail to identify a question or questions of law upon which the Committee has erred.

Grounds of appeal – affected sites

Coffey submitted 5 grounds of appeal for the affected sites.  The first question was whether the Committee had misconstrued and misapplied section 27 of the Act.  The Court considered that the second, third and fourth grounds of appeal effectively repeated the first ground.[4] The fifth ground of appeal repeated the four questions submitted in relation to the source site. 

Supreme Court appeal findings

Chaney J rejected all four grounds of appeal in relation to the source site without difficulty and dismissed the appeal in its entirety.

In relation to each of the affected sites’ appeals, grounds 1 to 4 were condensed into the question of: whether the Committee erred in law by applying section 27 of the Act to determine the responsibility of Coffey for remediation of the affected sites.[5]

Section 27 of the Act deals with land-owners’ responsibility for remediation.  Sub-sections 27(1) and 27(2) provide two different ways a person, who became an owner of a site before the commencement of the Act, may be responsible for remediation of a source site.

Sub-section 27(2a) provides that:

A person who, under subsection (1) or (2), is responsible for remediation of a site that is a source site is also responsible for remediation of a site that is an affected site to the extent that —

            (a)         the contamination of the affected site is caused, or contributed to —

                  (i)         by contamination; or

                  (ii)         by a substance,

                        which has migrated to the affected site from the source site…[6]

The Committee in the affected site decisions applied section 27 (the Court assumed the Committee’s reasoning relied on sub-section (2a)) to conclude that persons who caused and/or allowed contamination to occur at the source site (i.e. WASE, WKG and Coffey) also caused and/or allowed contamination to occur at the subject site, with the same shares applying.[7]

The Court found that the Committee’s approach was incorrect as section 27 does not apply to persons other than land owners of the source site. 

The only basis upon which Coffey or WKG could be found responsible for remediation of the affected sites under the Act was pursuant to sub-section 25(3). The Court found that the Committee had misconstrued section 27 as not requiring a separate consideration of responsibility for remediation of each of the affected sites under sub-section 25(3).

Section 25(3) of the Act provides that:

A person who caused, or contributed to, the contamination of a site before the commencement of this Act is responsible for remediation of the site only to the extent that the person caused, or contributed to, that contamination by an act that was done without lawful authority.

Although the Act was passed in November 2003 and the contamination occurred in 2004, the contamination occurred before the operative provisions of the Act came into force on 1 December 2006.  It is worth noting that if the contamination had occurred after the commencement date of the Act, section 25(1) of the Act would apply instead of section 25(3).[8]

The Court remitted the matter to the Committee pursuant to section 78(1)(c) of the Act, to allow the Committee to consider responsibility for remediating the affected sites under sub-section 25(3).  The Court emphasized that the Committee was bound to consider Coffey’s submissions regarding the apportionment of responsibility for the affected sites under sub-section 25(3) of the Act.

Justice Chaney warned that, had the Committee applied the correct statutory test for determining non-landholder responsibility for the affected sites, it may have reached the same apportionment.  Equally the Court acknowledged that the Committee may have reached a different conclusion based on the parties’ submissions. 

Ground 5 of the affected sites appeal was dismissed on the same reasoning as the source site questions.

This case has developed over a period of over ten years and is an example of the difficulties that arise in determining responsibility for contamination remediation.  While the pipe was repaired in 2005 which stopped the fuel leak, it is likely that the source site and affected sites have remained contaminated as the parties await a determination regarding who is responsible, in what proportion, for the remediation. This period has been protracted. Contamination which is not contained may migrate further afield which will again increase remediation costs.  Property owners and operators also face restrictions in dealing with properties classified as “contaminated – remediation required”. 

When managing a contaminated site of any nature it is important to identify parties’ legal rights and responsibilities and to develop a strategy at an early stage. Please contact HopgoodGanim’s Environment team for further information on any contamination and environmental queries.

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[1] Coffey LPM Pty Ltd v The Contaminated Sites Committee [2014] WASC 504, see a summary at paras[36]-[65]

[2] Op. cit., para [17]

[3] Op. cit., para [18]-[20]

[4] Op. cit., para [129]

[5] Op. cit., para [129]

[6] The remainder of the sub-section is unnecessary for the grounds of appeal.

[7] Op. cit., para [130]

[8] Section 25(1) addresses responsibility of people who caused or contributed to contamination after 1 December 2006. Section 25(3) addresses the same matters but prior to 1 December 2006.