Company operating waste management licence – Company in liquidation – Liquidator seeking to disclaim licence – Whether licence being “property” capable of disclaimer under Insolvency Act 1986, section 178 – Whether provisions of Environmental Pollution Act 1990 excluding application of power to disclaim
On July 21 1992 Cambridgeshire County Council, granted to Mineral Resources Ltd , the company, a waste disposal licence, in respect of a landfill site at Sawston Road, Hinxton, under the Control of Pollution Act 1974. By virtue of section 77(2) of the Environmental Pollution Act 1990, the licence was treated with effect from May 1 1994 as a waste management licence within the meaning of section 35 of that Act. By August 30 1997 when the lease of the land expired, the company was in financial difficulties. It ceased trading on September 5 1997.
A liquidator, Mr Stout, was appointed, who decided that the licence was effectively unsaleable and on November 3 gave notice purporting to disclaim it. On November 25 the Environment Agency, which had replaced the council as the waste regulation authority, sought a declaration that the liquidator had no power to disclaim the licence contending that: (1) the licence was not “property” within the definition of section 436, and therefore incapable of disclaimer under section 178 of the 1986 Act; and (2) that, even if the licence was “property”, the provisions of the 1990 Act, on their true construction, excluded the application of the power to disclaim contained in section 178 of the 1986 Act, so far as a licence under section 35 of the 1990 Act was concerned.
Held The purported disclaimer was ineffective.
1. A waste management licence was “property” within section 436 of the 1986 Act since the intention of that section was to confer a wide definition (see re Paramount Airways Ltd [1990] BCC 130, per Browne-Wilkinson V-C at p148, and therefore “property” in the context of section 178 was also to be given a wide meaning. That conclusion was also supported, inter alia, by the test set out by Lord Wilberforce in National Provincial Bank Ltd v Ainsworth [1965] AC 1175, at p1247, and by the fact that the legislation creating waste management licences provided for their transfer.
2. However, there was a conflict between a licence being disclaimable property under section 178 of the 1986 Act and the clear provisons of section 35(11) of the 1990 Act. Bearing in mind the public interest in the maintenance of a healthy environment, applying general rules of statutory construction, and considering the consequences of a licence being capable of disclaimer, the interest in the protection of the environment contained in the 1990 Act was to prevail over that of fair and orderly winding up of companies contained in the 1986 Act.
3, Therefore a waste management licence, albeit that it was “property” within section 436, and hence within section 178, of the 1986 Act, was none the less not capable of disclaimer in the light of the provisions, and in particular section 35 (11), of the 1990 Act: cf Panamericana de Bienes y Servicios SA v Northern Badger Oil & Gas Ltd (1991) 81 DLR (4th) 280 and Midlantic National Bank v New Jersey Department of Environmental Protection (1986) 474 US 494, 106 S Ct 755 (1986).
Rex Tedd QC and Andrew MacNab (instructed by the solicitor to the Environment Agency) appeared for the applicant; Anthony de Garr Robinson (instructed by the solicitor to Keith Stout & Associates) appeared for the respondent.