Company operating landfill site under licence – Environment Agency modifying licence and imposing conditions – Alleged failure to comply – Agency laying information – Administrator appointed over company – Whether leave required for commencement of criminal proceedings – Whether leave correctly refused – Sections 10 and 11 of Insolvency Act 1986
The respondent company operated a 24ha landfill site at Nant-y-Gwyddon in the Rhondda Valley, pursuant to a waste-management licence issued by the appellant agency. Between 1996 and March 1997, the agency received over 200 complaints from local residents about obnoxious fumes from the site. In December 1996 a formal warning was sent. Improvements took place, but the agency considered them to be inadequate. The problem continued to worsen despite further letters from the agency and the imposition of further conditions on the licence. Two enforcement notices and an injunction were issued, but they failed to secure compliance with the licence conditions.
In December 1998 the directors of the company petitioned for an administration order to be made in relation to the company. In January 1999 the agency laid an information before the justices alleging contravention of the licence conditions by the company. An administration order was subsequently made over the company. An application was made by the administrator for a direction as to whether the agency required leave under sections 10 and 11 of the Insolvency Act 1986 to bring or continue criminal proceedings. The judge held that the agency did require leave, and that it was to be refused in the present case. The agency appealed.
Held: The appeal was allowed.
1. Sections 10 and 11 of the 1986 Act did not fall to be construed in the narrow manner suggested in Air Ecosse Ltd v Civil Aviation Authority (1987) 3 BCC 492. The correct approach was that outlined in Bristol Airport plc v Powdrill [1990] Ch 744. The critical factors were the ordinary meaning of the words used and the statutory objectives of sections 10 and 11, and, on that basis, it could be concluded that they including criminal proceedings. Accordingly, the judge had been correct to conclude that leave had been required.
2. However, the judge had erred in the exercise of his discretion. He should not have regarded the interests of the company’s creditors as trumping all other considerations. He had failed to take into account certain evidence, and, furthermore, in the event of conviction, there was a statutory obligation on the court to fix the amount of the fine to take account of all the circumstances, including the financial circumstances of the company. There were compelling reasons why leave should have been given. The purpose of the licence was to ensure that the disposal of controlled waste did not give rise to: (i) pollution of the environment; (ii) harm to human health; and (iii) serious detriment to the amenities of the locality, and the case had involved the first and third.
Stephen Hockman QC and Stephen Moverly Smith (instructed by the solicitor to the Environment Agency) appeared for the appellant; Stephen Davies (instructed by Palser Grossman, of Cardiff) appeared for the respondent.
Thomas Elliott, barrister
