England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		4th February 2010

1. MR JUSTICE SALES: This is an oral hearing for the claimant, Redland, to apply for permission to bring judicial review proceedings to challenge a remediation notice made under section 78E of the Environment Protection Act 1990 (as amended) against Redland in a revised form dated 22nd July 2009 by the Secretary of State.
2. The remedial notice relates to land at St Leonard's Court, Sandridge, Hertfordshire, which is contaminated by bromide and bromate in the top soil and lower strata. The notice identifies Redland as an "appropriate person", within the meaning of 1990 Act, who is liable to meet certain remedial costs on the basis that Redland caused the bromide and bromate to enter into the soil at the site.
3. The notice requires Redland to bear the cost of certain assessment actions and certain interim remedial treatment actions. The assessment actions relate to monitoring the impact of bromide and bromate in local water supplies. The interim remedial actions relate to contributions Redland is required to make to the cost of pumping and treatment of contaminated ground water by Veolia, the local water supply company, and to the cost of disposing of such water by Thames Water Utilities, the local sewage company.
4. Redland makes reference to one particular interim remedial measure which was included in the notice and says that the Secretary of State erred in law in including it. This was a requirement that Redland bear costs relating to the continuation of existing scavenge pumping and treatment being carried by Veolia at Bishop's Rise, Hatfield. Scavenge pumping is designed to abstract bromate contaminated ground water from the ground at a point before it enters the public water supply and hence to prevent contamination of the public water supply.
5. The background to the application is as follows. From the 1950s to about 1980 undertakings, which have now become Redland, carried on chemical production of the site. The work was carried on and buildings erected on hardstanding on the site. All the bromate and bromide at the site were generated and deposited in the soil, as a result of the chemical processes carried on there by Redland in that period. There was an element of leakage into the soil over that time and gradually the contaminants worked their way down in the aquifer strata and into the water course flowing to the points used for extraction of water for public supplies.
6. The water company, Veolia, has been compelled to set up scavenge pumping to interrupt the flow of contaminants into those supplies so as to safeguard them. Redland's chemical works at the site ceased in about 1980 and in due course the second interested party, Crest, a developer of residential properties, identified the site as a development site in about 1983. Crest carried out some testing of the sight and identified that there was a degree of bromide contamination in the upper soil. It did not appreciate how deeply bromide had already penetrated down through the soil and into the aquifer. Crest acquired the site from Redland in September 1983. In early 1984 Crest carried out some preliminary preparatory work on the site. It demolished the existing buildings and broke up the hardstanding. However, no construction works were carried out for a period of two-and-a-half years until development of the site was carried out in 1986 to 1987. In that two-and-a-half year period the land was left exposed to the elements and the removal of buildings and hardstanding meant that rain had a greater effect in washing bromide and bromate down into the soil than otherwise would have been the case.
7. Before Crest commenced development works in 1986 it excavated and disposed a shallow layer of soil across the site. This was done in the hope of removing any soil contaminated with bromide (at the time as the inspector subsequently found Crest did not appreciate that bromide might also be present and create a problem).
8. Unfortunately the excavations by Crest were too shallow and failed to remove all the contaminants on the land. They had already penetrated far further into the land and part because of the accelerated infiltration into the lower strata caused by the greater exposure of the land to rain as a result of the demolition of buildings and hardstanding by Crest. In about 1987 Crest sold off the land.
9. The Environment Protection Act 1990 was amended by the Environment Act 1995 to introduce a regime in sections 78A and following for requiring remedial works to be carried out in relation to contaminated land. The provisions came into effect on 1st April 2000. Section 78E imposes a duty on an enforcing authority to require remediation of contaminated land. Section 78E provides:

"(1) In any case where—

(a) any land has been designated as a special site by virtue of section 78C(7) or 78D(6) above, or

(b) a local authority has identified any contaminated land (other than a special site) in its area

the enforcing authority shall, in accordance with such procedure as may be prescribed and subject to the following provisions of this Part, serve on each person who is an appropriate person a notice (in this Part referred to as a 'remediation notice') specifying what that person is to do by way of remediation and the periods within which he is required to do each of the things so specified

...

(3) Where two or more persons are appropriate persons in relation to any particular thing which is to be done by way of remediation, the remediation notice served on each of them shall state the proportion, determined under section 78F(7) below, of the cost of doing that thing which each of them respectively is liable to bear

(4) The only things by way of remediation which the enforcing authority may do, or require to be done, under or by virtue of this Part are things which it considers reasonable, having regard to—

(a) the cost which is likely to be involved; and

(b) the seriousness of the harm, or pollution of controlled waters, in question

(5) In determining for any purpose of this Part—

(a) what is to be done (whether by an appropriate person, the enforcing authority or any other person) by way of remediation in any particular case

(b) the standard to which any land is, or waters are, to be remediated pursuant to the notice, or

(c) what is, or is not, to be regarded as reasonable for the purposes of subsection (4) above

the enforcing authority shall have regard to any guidance issued for the purpose by the Secretary of State."

10. In this case the site was identified as contaminated land in 2002 and the matter was referred to the Environment Agency to take enforcement action. It was then the responsibility of the Environment Agency, in the first instance, to issue a notice requiring "appropriate persons" (ie persons identified as responsible for causing or knowingly permitting land to become contaminated) to carry out works to assess the problem and, as appropriate, to carry out remedial works. The regime in the 1990 Act includes provision for responsibility for assessment and remedial works to be assigned in relation to more than one "appropriate person" in respect of the same contaminated land and for apportionment between them of liability to bear costs of assessment and remedial works. Section 78F of the 1990 Act provides:

"(1) This section has effect for the purpose of determining who is the appropriate person to bear responsibility for any particular thing which the enforcing authority determines is to be done by way of remediation in any particular case

(2) Subject to the following provisions of this section, any person, or any of the persons, who caused or knowingly permitted the substances, or any of the substances, by reason of which the contaminated land in question is such land to be in, on or under that land is an appropriate person.

(3) A person shall only be an appropriate person by virtue of subsection (2) above in relation to things which are to be done by way of remediation which are to any extent referable to substances which he caused or knowingly permitted to be present in, on or under the contaminated land in question.

...

...

(6) Where two or more persons would, apart from this subsection, be appropriate persons in relation to any particular thing which is to be done by way of remediation, the enforcing authority shall determine in accordance with guidance issued for the purpose by the Secretary of State whether any, and if so which, of them is to be treated as not being an appropriate person in relation to that thing

(7) Where two or more persons are appropriate persons in relation to any particular thing which is to be done by way of remediation, they shall be liable to bear the cost of doing that thing in proportions determined by the enforcing authority in accordance with guidance issued for the purpose by the Secretary of State."

The statutory guidance referred to in section 78F subsection (6) and (7) and section 78E(5) is contained in Annex 3 to circular 02/2000 (Annex 3).

11. In this case Redland and Crest were both identified by the Environment Agency as "appropriate persons" in respect of the contamination at the site. The Environment Agency issued a notice requiring them both to bear the cost of carrying out assessment works but not remedial works. They both appeal to the Secretary of State who referred the appeals to an inspector to hold an enquiry and report. For present purposes I focus on Redland's appeal.
12. Veolia and Thames Water were also dissatisfied with the terms of the Environment Agency's notice. They were having to carry out scavenge pumping and disposal of contaminated water to protect the public water supply and were bearing the cost of that themselves. They maintained that the remediation notice should place the burden of that cost on Redland and Crest. They gave notice to Redland and Crest that this contention would be raised at the inquiry since the inspector had power to recommend and the Secretary of State had power to adopt, amendments of the notice in ways adverse to the appellants. The Environment Agency was also persuaded by their arguments and supported them at the inquiry.
13. It was also clear at the inquiry that issues of responsibility and apportionment of liability for works, as between Redland and Crest would be very much in issue. The inquiry took place and the inspector produced a thorough and lengthy report. On the question of responsibility the costs relating to the scavenge pumping at Bishop's Rise, he accepted the arguments of Veolia and Thames Water and recommended that the remediation notice be amended to impose liability on Redland and Crest for those costs as appropriate costs of an interim remedial measure in the form of scavenge pumping, pending more detailed assessment of possible better alternative long-term solutions.
14. The Secretary of State adopted that recommendation and amended the remediation notice accordingly. This is one of the points on which Redland now seek to bring these judicial review proceedings.
15. The inspector also made determinations regarding the extent of the respective liabilities of Redland and Crest to bear the cost of the assessment and remedial works set out in remediation notice. The Secretary of State again adopted the inspector's recommendations in the final notice. Redland now also seeks permission to bring judicial review proceedings to challenge this aspect of the notice in two respects. First, Redland says proper application of the statutory guidance, issued under section 78F(6), relevant to exclusion of liability of an appropriate person, Redland should have been excluded from liability in respect of works relating to the presence of bromide (as distinct from bromate) at the site) and second, Redland says that the Secretary of State erred in his assessment of the proportions in which Redland and Crest should be liable in respect of costs relating to dealing with both bromate and bromide.
16. I deal with the proposed challenge to the Secretary of State's decision to include scavenge pumping in remediation notice as an interim remediation measure in respect of which Redland should bear part of the cost.
17. The points made by Mr Reed for Redland on this aspect of the case all relate to the question whether scavenge pumping could, in the circumstances of this case, be regarded as the best practicable technique for remediation works as required by the legislation and the guidance issued under it. Section 78E controls the formed extent of remedial works which can be contained in a remediation notice. The enforcing authority is required to have regard to Annex 3. Annex 3, paragraphs C17, C18, C8 and C19, for the transcript bundle 656 to 657 of Annex 3 provide as follows:

"..."

Redland also referred in particular to paragraphs C30 for transcript writer bundle page 658 and C37, bundle page 660, which provide as follows:

"..."

18. The inspector concluded there was not sufficient information yet available to identify long-term remediation works in the notice. They would have to be reviewed in light of further information coming to hand. However he concluded, on the relevant cost benefit analysis, that scavenge pumping at Bishop's Rise was an essential and appropriate remedial measure to meet an imminent threat of contamination of public water supplies and should be specified in the notice as interim treatment action. The effect of this, of course, would be to require Redland and Crest to bear the costs of that measure. The relevant paragraphs of his report under the heading "Interim Treatment Action" are paragraphs 861 to 874 in these terms:

"861. In this case, as I have already outlined, serious pollution is being caused by bromate contamination of groundwater intended for public supply. The Bishops Rise (Hatfield) supply cannot be used and the evidence suggests that, were it not for scavenge pumping, the Essendon supply would also be lost and less water would be available to north London from the Northern New River wells. The problem would then be compounded because these boreholes are effectively scavenging whilst being used for supply. A reduction in their use would increase contaminant concentrations in the spring fed River Lee, which could have an even greater impact on supply, because this feeds the treatment works at Coppermills and Chingford South, both of which use ozone and are therefore sensitive to bromide in addition to the bromate. Also, any reduction in abstraction from established boreholes, affected by the plume, is likely through diffusion to increase contaminant concentrations in the fine pores of the chalk, making it more difficult to remediate in the future.

862. It has been argued that there is no need for urgent remediation because the water companies are obliged to provide an adequate supply of water to their customers and therefore would continue scavenge pumping. I agree that this pumping is likely to continue; the water companies evidently consider it to be a cost effective way of protecting supplies. However, I do not accept that the cost of this protective action should properly be borne by the companies or their customers, as this runs contrary to the principle that the polluter should pay.

863. These considerations lead me to conclude that, pending the findings of assessment actions that will allow a suitable long term remediation strategy to be implemented, there is an urgent need for interim action to be taken by those who are liable for the remediation of pollution caused by the bromate linkage. This would relieve the water companies of the need to fund scavenge pumping in order to maintain their supplies.

864. As things stand, there are substantial other costs that these companies are having to meet in order to cope with the consequences of the bromate contamination. Scavenge pumping helps to keep this other expenditure down and the Water Services Regulation Authority (OFWAT) evidently consider it to be justifiable, as they have allowed the cost to be recovered through customers' bills.

865. The other expenditure relates to a variety of measures including the development of new supplies and of new treatment methods that will allow more use to be made of existing sources. These measures will effectively increase the available resource and therefore the flexibility of the companies to manage supplies; this is particularly important in an area such as this where demand is rising, existing resources are seriously stressed and reliance has necessarily been place on the use of emergency boreholes. Whilst the measures have been designed to help manage the bromate contamination, the benefit of the investment should be reaped by the companies and their customers. It should not be used to compensate for the loss of supplies that would result if scavenge pumping at Hatfield were to cease.

866. Nevertheless, it is necessary to consider whether continuation of this scavenge pumping represents the best practicable technique of urgent remediation that is currently available.

867. The water companies maintain that alternatives, to the Bishops Rise arrangement, have been looked at. However, the evidence is limited to a summary of options assessed by TVW shortly after this Hatfield borehole had been taken out of supply. This, in itself, is not persuasive; it is out of date and lacks analysis.

868. Given the stage at which the companies suggested that the notice should be amended to include a requirement for scavenge pumping, it would have been helpful to have seen an assessment, by them, of the realistic alternatives that are currently available. Set against this, those opposed to the inclusion of such a requirement have identified possible alternatives in general terms, being told, a year before the inquiry opened, that pumping at Bishops Rise was being considered as a remediation option.

869. I recognise that those persons are disputing liability, but (EPA) S.78L allows for a notice to be modified at appeal stage. An appellant has a right to be heard, under (2006) Regulation 11, if the notice is to be notified in a way that is less favourable to him. However, in this case, the appellants had forewarning of the suggested modification and the inquiry offered them the opportunity to address that suggestion; indeed, I highlighted this at the pre-inquiry meeting. In the circumstances, I am satisfied that they have been given a fair chance to challenge the water companies' proposal for interim treatment and to test the companies' evidence in support of that proposal. The EA now share that view and are proposing that the notice be modified so that suitable provision is made for this treatment to be funded by the appropriate person(s).

870. In the event, no party has demonstrated that a particular technique has the best combination of practicability, effectiveness and durability, because no technique has been properly assessed apart from the Bishops Rise scheme.

871. Certainly, this scheme has some obvious attractions, beyond the fact that there need be no delay in implementation. Some of these are as follows. The man-made infrastructure is in place, thereby avoiding the need for capital expenditure, and the underground fissure system which feeds the borehole has been enlarged as a result of substantial abstraction over many years. Following extensive trials, the operation and impact of the scheme is reasonably well understood; both water companies are now experienced in managing their supplies with the scheme in place. The pumping appears to be rapid and effective in lowering bromate concentrations at Essendon and the Northern New River wells and it removes significant quantities of contaminants from the aquifer. Also, sustainable arrangements are in place to treat the contaminated water and return it to the aquatic environment.

872. Given the urgent need for action, it is hard to imagine a better interim measure. Nevertheless, I recognise that the annual operating costs, which are estimated to be about £570,000 - £660,000, have not been compared in any transparent and meaningful way with the costs of possible alternatives.

873. Those who are most opposed to the inclusion of this as an interim treatment action, in the notice, argue that a period of 12 months should be allowed for alternatives to be assessed and the best one implemented. In my view, such a short timescale is likely to rule out an arrangement involving new boreholes(s) upstream of Hatfield, given the need to develop both the abstractions(s) and the attendant systems for treating and disposing of the abstracted water. I have no doubt that the potential to change existing water management procedures, so as to reduce the amounts abstracted from Hatfield, could be investigated. However, the likelihood of this producing a significant cost saving is very small, bearing in mind that the water companies clearly considered the current arrangements to be the most cost effective and OFWAT have already decided that the costs of the exiting regime can be passed through to customers. Also, as I have already observed, the scope for reducing existing groundwater abstractions is limited by the need to continue scavenging so as to protect the River Lee and the prospects for future remediation of the aquifer.

874. On balance therefore, the continuation of scavenging pumping at Bishops Rise would appear to offer the best practicable technique for the urgently needed means of allowing public water supplies, that have been affected by the bromate contamination, to be provided at reasonable cost whilst a strategy to remediate the aquifer is developed."

He also referred to the issue of costs and benefits at paragraph 886 as follows:

"886. The dispute over Schedule 2 is focussed on the suggested incorporation of treatment actions. For the reasons given above, I do not consider it appropriate to specify long term remediation standards at this stage, but I do see an urgent and justified need for the appropriate person(s) to fund continuation of the scavenge pumping at Bishops Rise, on an interim basis. As I have already indicated, the benefits of pumping clearly warrant the expense."

19. On a straightforward reading of this part of inspector's report it is, in my view, clear that the inspector addressed the question: what would be the best practicable technique in the short-term to meet the already present urgent need to safeguard the public water supply from the contaminants filtering from the site? Identified there was an absence of clear evidence from both parties addressing the issue of the best practical technique to meet that urgent existing need (see paragraphs 867 to 870) and therefore had to address the relevant question (see paragraph 866) on the available evidential material before him (paragraphs 871 to 874) reaching the conclusion, on the balance of that material that continuation of scavenge pumping at Bishop's Rise offered the best practicable technique in light of the benefits and cost to meet that need (paragraph 874).
20. This reasoning seems impeccable to me. It is also to note that Redland have never suggested that scavenge pumping should stop at Bishop's Rise. They simply do not want to pay for it and say they should not have to do so until further investigations have been carried out. That is not a good answer to the reasoning of the inspector, founded, as it is, on the already present pressing need to take steps to counter the contamination of the public water supply by contaminants from the site.
21. The Secretary of State's decision letter of 22nd July 2009 adopted the inspector's reasoning and conclusions on this issue. The relevant passage is at paragraphs 22 to 26 as follows:

"22. The Secretary of State also agrees with the Inspector that, despite its effectiveness, scavenge pumping at Bishops Rise should not be specified in the remediation notice as the long-term means by which the remediation of St Leonard's Court should be accomplished. This is because it has not been satisfactorily demonstrated that it is the best practicable approach available in the long-term. The requirement to demonstrate this is explained in Part 4 of Chapter C of the (statutory) Annex 3 of the 02/2000 Circular ('the Statutory Guidance'). Completion of the assessment actions in the revised remediation notice is likely to enable the best practicable long-term approach to be established and this should be stipulated in subsequent remediation notice(s).

23. Section 5 of the (non-statutory) Annex 2 of the 02/2000 Circular provides guidance on the term urgent remediation action. This guidance explains that, where urgent remediation is deemed necessary, the enforcing authority may omit certain steps which are normally required so that they may secure remediation more rapidly. This does not include a lessening of the requirement to establish that the remediation approach employed is the best practicable technique. However, the Secretary of State believes that the circumstances in which the best practicable technique is identified must be borne in mind when assessing if this test has been met. If urgent remediation is required it must be possible to identify what that remediation should be to an appropriate timetable.

24. As set out in paragraph 19 above, the pollution of the aquifer by contamination from St Leonard's Court is serious and ongoing. The extent and impact of the pollution is currently being limited by the actions of the water companies in undertaking scavenge pumping at Bishops Rise. If this scavenge pumping were not taking place, the Secretary of State is satisfied that the imminent danger of serious pollution would warrant urgent intervention.

25. The Secretary of State supports the Inspector's conclusion that scavenge pumping at Bishops Rise is the best practicable technique currently available for the urgent remediation of St Leonard's Court. Inclusion of this action in the remediation notice would enable the ongoing costs to be borne by the polluters rather than by the water companies and their customers as is currently the case. This urgent remediation should continue until a longer term solution is implemented. To accommodate the very slight possibility that the urgent action alone may successfully remediate the contamination, the Secretary of State agrees with the Inspector's recommendation that scavenge pumping should cease if concentrations of bromate are reduced to 5 micrograms per litre at various specified monitoring points. The figure of 5 micrograms per litre of bromate may well prove to be more protective than the figure eventually arrived at for the remediation of the aquifer but the Secretary of State believes that it is appropriate for these purposes.

26. In finding that scavenge pumping at Bishops Rise should be included in the remediation notice the Secretary of State agrees with the reasoning set out in IR 861-881. The Secretary of State notes that inviting representations from the parties to this case subsequent to the appeal hearing has further strengthened the argument that adequate opportunity has been given for objections on this point to be raised. The Secretary of State does not believe that any of the representations received present a valid argument against inclusion of this action."

22. The first point of criticism that Mr Reed makes of the Secretary of State's decision on this issue is that he says the Secretary of State misunderstood the inspector's conclusion and was in error at paragraph 25 of the decision letter in stating that the inspector had in fact concluded that scavenge pumping at Bishop's Rise was the best practical technique in accordance with legislation and guidance to deal with the interim position.
23. In my view, on any fair reading of the inspector's report this is an unarguable contention. The inspector's report was clear on the point. The inspector recognised that it was necessary to consider whether continuation of the scavenge pumping represented the best practicable technique of urgent remediation that was currently available (paragraph 866) and after reviewing the available evidence carefully concluded that it was (paragraph 874). The Secretary of State has correctly understood the report and the suggestion to the contrary is unarguable.
24. Next, Mr Reed submitted that the Secretary of State and, on this interpretation of the inspector's report the inspector, erred in law in reaching the conclusion that the scavenge pumping was the best practicable technique for interim remedial action, because there was no evidence on which they could have reached that conclusion. This again is a hopeless contention. Both the inspector and the Secretary of State identified, on sound evidence, an urgent need in the public interest to take effective remedial action to safeguard public water supplies from a present risk of contamination by pollutants from the site. The Secretary of State correctly stated in paragraph 24 of the decision letter that there was an "imminent danger of serious pollution."In those circumstances urgent, indeed immediate, effective preventative measures were required to be in place. For the reasons set out by the inspector the continuation of the scavenge pumping was the best available candidate having regard to benefits and costs. Indeed it does not appear that Redland ever identified any possible suitable alternative. I pressed Mr Reed on this and he could suggest none. In the circumstances there clearly was a proper evidential basis on which the inspector and the Secretary of State could conclude that continuation of the scavenge pumping was the best practicable technique available to meet the imminent danger of serious pollution of public water supplies from the site.
25. Finally, in relation to this matter, Mr Reed submitted for reasons given by the Secretary of State for including this remedial measure in the notice were defective. That contention is also hopeless. The Secretary of State's reasoning on the point is clearly set out in the decision letter. He adopted the reading of the inspector, whose own reasoning was also clearly set out in the inspector's report. Accordingly, permission is refused in relation to the challenge to inclusion in the notice of the scavenge pumping as remedial works.
26. I turn to Redland's next proposed ground of challenge to the notice which relates to the decision of the Secretary of State in exercise of his power under section 78F(6) only to exclude Redland from part of liability and not from the whole of liability. The question of exclusion of Redland from liability relates to the circumstances in which Redland sold the site to Crest in 1983. Redland contends that when it sold the site to Crest, Crest had information which allowed it to be aware of the broad measure of the presence of relevant pollutants on the land and that accordingly Redland should be exempt from liability in respect of the relevant pollutants by application of the "sold with information" test (test 3) set out in the relevant guidance issued under section 58F(6).
27. The relevant guidance is contained in paragraphs D57 and D58 of Annex 3 (page 680) of the bundle.

"which provide and the judgment will set out the terms of D57 and D58."

The relevant pollutants for the purpose of this argument are the bromides on the land not the bromates.

28. The issue of the extent of Crest's knowledge of the presence of bromate in the soil was resolved at the inquiry in Crest's favour, ie that it did not realise that they were no problems and no challenge is made to that. The present argument focuses on the application of paragraph D58(c) set out above.
29. Redland contends that Crest had sufficient information about the presence of bromides on the site at the time it purchased it. It should therefore be taken to have assumed all risks arising in respect of those contaminants and that accordingly Redland should have benefited from provision in the remediation notice, excluding it from liability in respect of those contaminants under "sold with information" test. The inspector addressed the issue at paragraphs 949 to 960 of the inspector's report. The critical paragraphs are at paragraphs 957, 958 and 960, which provide:

"957. On that basis, I am satisfied that Crest had information that would reasonably allow them to be aware of the broad measure of bromide's presence. They also knew that this bromide was soluble and had access to information, on the planning file, which suggested that there was a risk of groundwater contamination. I consider it reasonable that Crest should bear the liability for remediation in respect of bromide which was present on 1 September 1983.

958. However, I do not consider it reasonable that Crest should be held responsible for remediating the effects of bromide which had already leached into the groundwater by that date. This is because they did not know that the groundwater was contaminated. Thames Water Authority had recorded one high bromide result in a nearby borehole but, at that time, did not attribute it to activities at SLC.

...

960. I am led to conclude that Redland should be excluded from liability with respect to the bromide linkage, but only in part. I shall therefore deal with this in considering the apportionment of costs between them and Crest."

30. The Secretary of State dealt with the issue of exclusion from liability in the decision letter at paragraphs 34 to 39 which stated:

"34. The Secretary of State agrees with the Inspector's recommendation that neither Crest nor Redland should be entirely excluded from liability for either contaminant through the application of any of the exclusion tests described in Part 5 of Section D of the Statutory Guidance: IR/949 - 960.

35. In particular the Secretary of State agrees that in the application of the 'sold with information' test Crest did not have information that would have reasonably allowed them to be aware of the broad measure of the presence of bromide when they purchased the site. This is because, despite evidence that would reasonably allow awareness of the broad measure of bromide in the soil, Crest could not reasonably have been aware of the extent of the bromide contamination likely to have been already present in the aquifer at this time.

36. In respect of bromate the Secretary of State agrees that Crest did not have information that would have reasonably allowed them to be aware of the broad measure of its presence: IR/955-960.

37. The overall purpose of the 'sold with information' test is to exclude from liability those who have disposed of contaminated land 'in circumstances where it is reasonable that another member of the liability group, who has acquired the land from them, should bear the liability for remediation of the land': see the Statutory Guidance at paragraph D57. Paragraphs D58 and D59 then set out the matters to be considered in applying the test.

38. At IR952, the Inspector suggests that paragraph D.40 of the Statutory Guidance to mean that exclusion tests can be partially applied at the exclusion stage of the liability apportionment process (stage 4). The Secretary of State does not consider this to be correct. At this stage of the apportionment process exclusion tests should apply completely to a pollutant linkage or not at all. The partial applicability of exclusion tests should be considered subsequently as a factor in the final apportionment of liability, that is stage 5(which is explained at paragraph D.77 of the Statutory Guidance). Ultimately it would appear that is exactly what the Inspector does, see IR960 and IR 961-972.

39. Accordingly, at the time it purchased the site the information Crest had was sufficient only to justify a partial application of the 'sold with information' exclusion test with regard to the bromide significant pollutant linkage: IR958 and 960. The relevance of this is considered below in terms of apportionment. None of the exclusion test is met such as to entirely exclude the liability of either appellant."

Paragraph 35 is the critical paragraph. In the last sentence of that paragraph, the Secretary of State drew a distinction between the awareness of Crest in 1983 that there was bromide in the soil, ie the upper part of the site and that it could not reasonably have been aware of the bromide contamination which had already by then penetrated to lower aquifer strata on the land. In the light of the inspector's report I consider this was an assessment which the Secretary of State was plainly entitled to make. Mr Reed sought to suggest that the Secretary of State had misinterpreted the guidance in paragraph D58 of Annex 3 but in my judgment that contention is unarguable.

31. Mr Reed sought to contrast the language of paragraph D58C "presence on the land of the pollutant" with the language of the statute and paragraph D57 (presence of a significant pollutant "in, on, or under some land") to suggest that paragraph D58(c) is only concerned with the upper soil of the land. In my view that is an unarguable contention. The language of D58(c) is broad and cannot properly be construed in the way Mr Reed contends.
32. In the light of the purpose of the legislation as a whole, which is to deal with contamination by pollutants in, on or under land and in the light of object of having "sold with information" exemption, it is clear that paragraph D58 (c) is directed to the same problem of contamination by pollutants in, on or under land as the general legislation. It would be absurd to suppose that the guidance was intended to create a regime of exclusion from the general principle in the legislation that the polluter should pay for remedial works, based on only partial disclosure of information regarding relevant pollution governed by the statute to a purchaser of the land. Such an interpretation of paragraph D58(c) would also lead to results which would be grossly unfair as between buyers and sellers of land which cannot conceivably have been intended. Moreover adopting a very strict linguistic interpretation of paragraph D58(c), contrasting its language with that of paragraph D57 as proposed by Mr Reed, leads to other absurdities and indeed would defeat Redland's case. If the word "on" in paragraph D58(c) is used in contradistinction to the phrase "in, on, or under" in paragraph D57, Then, the "sold with information" test would only apply in relation to pollutants "on" the land, in the sense of resting on top of the land rather than "in" the land as the pollutants were in the soil of the land in this case.
33. For all these reasons I find this ground of challenge is unarguable and permission is refused.
34. I turn then to Redland's final ground of challenge which is apportionment of liability by the Secretary of State in the remediation notice as between Redland and Crest. This related both to bromide and bromate. The inspector dealt with this at paragraphs 961 to 976 of the inspector's report. In particular he said at paragraph 962:

"If the Secretary of State were to agree that both Redland and Crest caused bromate to be in, on or under the land at SLC, it would be necessary to apportion the costs of any bromate related remedial action between the two. Whilst there is no direct evidence of the relative quantities of bromate that are referable to them, Redland and Crest carried out very different operations on the land and controlled it for significantly different periods of time. In the circumstances, it would be unfair to apportion the costs of remediation equally and, in the absence of a more appropriate suggestion, Crest's proposal that the costs should be split 85% (Redland) to 15% (Crest) seems reasonable, as this broadly reflects the relative duration of periods when the site was under their control. In this respect, Crest's rounding up to the nearest 5% is favourable to Redland."

35. After the inspector produced his report, the Secretary of State gave the parties an opportunity to make further representations. Redland put in representations on the question of apportionment which raised an argument relating to the way in which Crest's actions had caused contaminants to be flushed into the soil at a faster rate. Redland said this:

"The failing of Crest's (and thus the Inspector's analysis) is that it is based simply on time alone. However, the flux calculation presented on behalf of Redland (which was in principle accepted by the Inspector at paragraph 903) showed that the removal of the hardstanding by Crest and other matters for which Crest were responsible had the effect of introducing a 4-fold increase in the rate of downward migration in comparison to the situation while the premises was in Redland's ownership. As a result, the level of Crest's liability should be proportionately increased to account for the increased acceleration of the contaminant. A note is attached as Appendix 1 to these submissions from Leslie Heasman, Redland's witness at the inquiry, which indicates the effect of increasing Crest liability either 4-fold or by double see paragraphs 1-4). The parties' liability for the bromate linkage should either be 40.60, Crest: Redland (if increased by a factor of 4) or 25.75, Crest: Redland (if doubled).

...

...

Second, and in any event, in the same way as is the case for the bromate SPL, the increased speed of flow caused by Crest's actions should also apply to the bromide SPL so that the proportionate liability should be either 83.17, Crest: Redland (if increased by a factor of 4) or 71:29, Crest: Redland (if doubled). The relevant calculations are included at Appendix 1, at paragraphs 5 and 6."

The Secretary of State dealt with this aspect of the notice at paragraphs 40 to 43 of the decision letter which stated:

"40. The Secretary of State supports the Inspector's recommendation that Crest should bear 15% of the liability for bromate contamination and 55% of the liability for bromide with the remaining 85% (bromate) and 45% (bromide) being allocated to Redland. In reaching his conclusions, the Secretary of State has paid careful attention to the general principles and specific approaches described in Part 6 of Section D of the Statutory Guidance (which are referred to in IR/961 and also above in paragraph 15).

41. In IR962 the Inspector looks to attribute liability for the bromate significant pollutant linkage on the basis of the quantities of bromate for which the two parties were responsible. This is consistent with the general principles of the Statutory Guidance. However, achieving this is not straightforward as it is not possible to measure the quantities involved accurately.

42. The Secretary of State notes the Inspector's comment in IR962 that Crest and Redland undertook very different operations whilst in control of St Leonard's Court. The qualitative contribution of these operations to the bromate contamination of the site is set out at length at various places in the IR. However, the complexity of this case does not very easily lend itself to a simple quantitative method which transparently captures all these arguments. In the circumstances, the Secretary of State believes that the period for which the two parties were in control of the site provides (see again IR962) an appropriate mechanism for apportionment and produces a result which is consistent with the broader facts of this case. Therefore the Secretary of State agrees that the division of liability for bromate should be Crest 15% and Redland 85% as described in IR962.

43. The Secretary of State also agrees with the Inspector's conclusion that the apportionment of liability for bromate (above) should form the basis of the apportionment of liability for bromide (IR966). This is because the same arguments which determine the apportionment of liability for bromate also apply to bromide (with the exception of the issue of degradation which does not arise). However, as noted by the Inspector, the apportionment of liability for bromide is affected by the additional consideration of the partial application of the 'sold with information' exclusion test discussed at paragraphs 36 - 39 above."

36. The critical part of the Secretary of State's reasoning is in paragraph 42. Mr Reed complains that the reasoning here is defective because it does not properly grapple and deal with the points on causation made by Redland. I reject that complaint. It is clear from reading the whole of the inspector's report and the whole decision letter that different causation mechanisms in relation to the contamination of the site were very much in the Secretary of State's mind. It is also relevant to refer to my judgment yesterday refusing permission to Crest to challenge the remediation notice which deals with the way in which Crest had contributed to the presence of contaminants in the site by demolition of the buildings and the hardstanding there. These were matters plainly taken into account by both the inspector and the Secretary of State.
37. Against that background it is in my view clear that the point made by the Secretary of State in his decision that there was no simple causative mechanism in this case, which could lead clearly to any particular apportionment of liability between Crest and Redland was a valid one. Rather a broad evaluative judgment on causation was required. Redland had caused all the bromide and bromate to be on the land in the first place and allowed them to filter down to the lower strata during its long period in control of the site. Crest had brought no contaminants onto the site but had accelerated the way in which the contaminants already in the land were flushed down to the lower levels.
38. As the Secretary of State fairly observed at paragraph 42 of the decision letter:

"...the complexity of this case does not very easily lend itself to a simple quantitative method which transparently captures all these arguments."

He therefore indicated, in sufficiently clear terms, that he did not accept Redland's proposed quantitative method and agreed with the broader evaluative judgment on causation responsibility made by the inspector. There is, in my view, no arguable defect in this reasoning and I refuse permission in relation to this ground as well.

39. MR JUSTICE SALES: We dealt with all the orders this morning. Is there anything else that we need to deal with arising from this that we need to deal with?
40. MR HART: My Lord, no.
41. MR JUSTICE SALES: I am grateful to all counsel. If a transcript is required of either judgement, the transcript writer will need to be provided with the bundles which I have referred to. Otherwise bundles can be returned.