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Commercial Landlords Beware

Posted on 1st June, 2018

A recent case involving waste has highlighted the potential risks to commercial landlords and remediation costs that can be incurred. The High Court gave its ruling in Stone and Another v Environment Agency [2018] EWHC 994 on 1 May 2018 and illustrates the importance of due diligence required by landlords and agents.

Facts

A tenant operated a waste management activity on a site which it leased from a company. Following the service of an enforcement notice by the Environment Agency the tenant ceased trading and vacated the site. The tenant left 471 tonnes of waste mattresses on site which equated to approximately 20,166 mattresses.

The company stated that they were unaware of the enforcement notice issued to the tenant as the relevant director had been abroad at the time. The landlord company failed to remove the mattresses from the site and the Environment Agency brought charges against the company and one of its directors for knowingly permitting the unauthorised storage of waste under the Environmental Permitting Regulations 2010.

Appeal

The landlord and director were convicted at the Magistrates’ Court. Two questions required consideration by the High Court, namely;

1. Were the Magistrates entitled to find that there was a continuing ‘waste operation’ between the dates charged, and

2. Were the Magistrates entitled to find that an offence of ‘knowingly permitting’ the operation of a waste facility did not require the prosecution to establish that the accused took a positive act but merely knew the waste operation was taking place?

The High Court concluded that the storage of waste pending its disposal or recovery was a ‘waste operation’ under the regulations.

The Environment Agency had argued that they did not need to establish any positive action on behalf of the landlord company or its director to prove the ‘knowingly permitting’ offence and the High Court agreed even though the director was abroad when the notice was served.

Conclusions

The prosecution illustrates the risks which landlords are exposed to when tenants undertake waste operations. Waste removal and decontamination costs can be significant for landlords and robust due diligence prior to agreeing a least is vital.

If you require advice on any of the points raised in this case please contact one of the members of Jacksons Regulatory Team or Commercial Property Team.

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