Landlords held criminally liable for tenants’ illegal waste operations

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Two recent prosecutions by the Environment Agency have seen landlords held criminally liable for their tenants’ illegal waste operations with the help of the 5-yard dumpster rental plans.  The cases demonstrate that in order to be liable for an offence, a landlord simply needs to be aware that the operation is being carried out from the site.  He need not know that is being carried out illegally or be actively involved in the operation.

In one case the landlord was ordered to pay £13,000 in fines, costs and compensation as a result of his tenants’ illegal waste operation.  In the other, the landlord company’s director was sentenced to a 12 month community order, ordered to undertake 150 hours of unpaid work and to pay costs of over £7000, with the landlord company also being ordered to pay a £5000 fine and costs of over £7000.

To minimise the risk of committing an offence, landlords must be sure to carry out proper due diligence on all prospective tenants and obtain evidence that they have all the necessary permits and permissions for the proposed operation.  Once in occupation and trading, landlords should keep a careful eye on their tenant’s operations and take early action to deal with any concerns.

Landlords should ensure that the lease includes obligations on the tenants to provide the landlord with copies of all waste transfer notes (a legally required record of waste movements on and off of a site) and copies of the Environment Agency’s compliance reports following site visits.  Should a tenant cease trading and abandon the site without first clearing it, landlords must take prompt action to clear the site in a responsible and lawful way.

Woody’s Recycling

Mr Joyner was the owner of a disused plant nursery near Totnes, part of which he let to two individuals, Mr Loveridge and Mr Weeks, for the purpose of operating a wood recycling business from the site (‘Woody’s Recycling’).

Waste disposal or recovery operations are either ‘regulated’ or ‘exempt’. A ‘regulated facility’ requires an environmental permit. An ‘exempt facility’, normally a small scale waste operation, does not. As soon as an operator exceeds the limits of their exemption and doesn’t obtain a permit, they are in breach of the Environmental Permitting (England and Wales) Regulations (2016) and have committed an offence.  The tenants told Mr Joyner that they had the permits required for the waste operation they were running but in fact the business operated under the waste exemption.

During the period of Loveridge’s and Weeks’s occupation, waste wood arrived but was not recycled or otherwise disposed of.  Following Mr Loveridge’s incarceration for an unrelated offence, Mr Joyner forfeited the lease (by locking the gates and taking back possession of the site).  Consequently Woody’s Recycling ceased trading, leaving 10,000 tonnes of waste wood (plus other materials such as old mattresses and building materials) at the site – far in excess of the 1,000 ton limit imposed by the site’s waste exemption.

Mr Joyner approached another recycling company to dispose of the waste wood but was told that it was of poor quality and therefore had little commercial value.  The company’s quote for removing the wood was in the region of £750,000.  The waste material subsequently caught fire resulting in a blaze the size of a football pitch that burned for 5 days and which cost the fire service more than £28,000 to deal with.

Mr Joyner was charged with, and pleaded guilty to, knowingly permitting the keeping of controlled waste on land in respect of which no environmental permit was in force, in a manner likely to cause pollution of the environment or harm to human health, an offence under the Environmental Protection Act 1990.  He was fined £3600 and ordered to pay £5000 in costs.  He was also ordered to pay the fire service £4250 compensation.  The Environment Agency also took action against Mr Joyner for the clearing up of the site.

Mr Loveridge, who was said to be in charge of the day-to-day operation of the waste recycling centre, was sentenced to 6-months imprisonment for operating an illegal waste operation, an offence under the Environmental Permitting Regulations 2010. Mr Weeks, who acted as a consultant to Woody’s Recycling, was fined £9553 and ordered to pay £1767 costs.

Stone and Salhouse Norwich Ltd. v Environment Agency 2018

The court was assisted by the previous case of Stone and Salhouse Norwich Ltd. v Environment Agency [2018] EWHC 994, in which the Magistrates Court had considered the meaning of ‘knowingly permitted’.

Salhouse owned a site which it let to a mattress recycling business that did not have the necessary environmental permits. The Environment Agency served an enforcement notice on the tenant, which subsequently ceased trading and vacated the site leaving behind over 20,000 mattresses.  Despite entering into some initial discussions with the Environment Agency, Salhouse did nothing to deal with the stockpile of waste mattresses and was eventually prosecuted (along with its director, Mr Stone) by the Environment Agency for knowingly permitting storage of waste without authorisation under the Environmental Permitting (England and Wales) Regulations 2010.  In this context ‘storage’ includes storage pending disposal such that it amounts to a waste operation which requires the necessary authorisation.

As well as arguing that they were not carrying out a waste operation, Salhouse and Mr Stone tried to argue that they had not ‘knowingly permitted’ such an operation as they were unaware of the enforcement notice and simply ‘passively suffered’ the presence of the mattresses.  The Environment Agency argued that there was a continuing waste operation after the enforcement notice had been served which Salhouse knowingly permitted for the purpose of the offence under the 2010 Regulations.

The Magistrates Court agreed with the Environment Agency and Salhouse and Mr Stone were convicted.  Mr Stone was sentenced to a 12 month community order with a requirement to undertake 150 hours of unpaid work and the company was ordered to pay a £5000 fine.  In addition both Mr Stone and Salhouse were ordered to pay victim surcharges and costs of over £7000 each.

Mr Stone and Salhouse’s appeal was dismissed by the High Court, which found that the magistrates had been right to find that there was a continuing waste operation after the tenant left and that ‘knowingly permitting’ the operation of a regulated facility did not require the prosecution to establish a positive act on the part of the landlord. It was sufficient for the Environment Agency to prove that the accused knew such a waste operation was taking place and did nothing to prevent it i.e. ‘passive sufferance’ was enough to make the landlord criminally liable.