Landlords beware of picking up liability for tenant's waste

In May this year the High Court upheld a decision by the Magistrates’ Court to convict and fine a landlord for a failure to obtain a waste licence for waste left by its former tenant at its site. The tenant had operated a business recycling mattresses and held approximately 471 tonnes (over 20,000 mattresses) on site. The Environment Agency served an enforcement notice on the tenant as it was carrying out a waste operation but the tenant subsequently ceased trading leaving the mattresses on site. The landlord claimed not to be aware of the enforcement notice. The Environment Agency brought proceedings against the landlord and one of its directors for knowingly permitting the unauthorised storage of waste.

Following conviction at the Magistrates’ Court the landlord appealed to the High Court. The landlord argued that the recycling business had been the tenant’s business, and that the events after it left the site should be viewed as a clean-up operation not a waste operation. They also argued that even if it had been a waste operation, they had not knowingly permitted it as the director who was prosecuted was out of the country when the enforcement notice was served. The landlord claimed that the Magistrates’ Court was wrong to hold that it had knowingly permitted the operation of a waste facility without an environmental permit and further that it was wrong to find that the landlord company had acted with the consent, connivance or neglect of the director.

The High Court held that the Environment Agency was right to contend that “knowingly permitting” did not require a defendant to have taken a positive act. The prosecution did not have to prove that the landlord in this case had taken positive acts but it did have to prove that the landlord knew that a waste operation was taking place and had failed to prevent the waste operation from occurring. In this particular case the Magistrates Court were entitled to find that this is indeed was what had happened and that the landlord had knowingly permitted the waste operation without an environmental permit.

Comment

The risk to landlords from the operations of their tenants is a very real one and great care has to be taken particularly where a tenant has left a site without clearing it as a landlord may find itself liable for what has been left behind. This may include a criminal liability for failure to take the correct steps to manage those matters. The bar for what constitutes “knowingly permitting” in the context of waste and other environmental offences is set relatively low and rarely requires positive acts by a party. This case is a reminder to landlords and their Managing Agents to properly monitor and assess what is going on at a site both during and after a tenant has left.

Stone v Environment Agency [2018] EWHC 994 (Admin)