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Judgment handed down in Yarra City Council v MFESB and Ors

26 July 2017

Today the Court of Appeal allowed, in part, an appeal against a declaration that the City of Yarra (‘Yarra’) was liable to compensate the Metropolitan Fire & Emergency Services Board (‘the MFESB’) for the costs of complying with clean up notices issued by the Environment Protection Authority (‘the EPA’) relating to land in Richmond.

The appeal concerned industrial waste placed on the land between 1914 until the early 1960’s, when it was occupied by the City of Richmond (‘Richmond’). Following the amalgamations of municipal councils, Yarra became the successor in law to Richmond in 1994.

In 2004 the land was sold by the State of Victoria to the MFESB.  In 2005 the MFESB was informed about soil contamination on the land. The EPA served clean up notices on the MFESB in 2006 with which the MFESB complied. The MFESB issued proceedings in the Supreme Court against Yarra relevantly for the recovery of its costs of compliance. The issue of liability was heard as a preliminary issue.

The Court of Appeal held that Yarra is liable for the pollution caused by Richmond prior to the transfer of Richmond’s contingent liabilities to Yarra.

However, the Court held that it was premature to make a formal declaration that Yarra was liable to compensate the MFESB until specific issues were determined at trial, including the terms of the contract of sale by the State of Victoria to the MFESB, the supervision of demolition work by a contractor; the alleged lack of particularity of the MFESB’s pollution claim; the absence of knowledge of Richmond of the presence of the industrial waste on the land; and the consequences of representations of the MFESB's planning consultants.

The Court allowed the appeal in part and set aside the declaration made by a judge of the Trial Division. The Court remitted the matter to the Trial Judge to determine the remaining issues.

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