INTRODUCTION TO ENVIRONMENTAL LAW

Tutorial Week 8
Site Contamination
Paintworks Pty Ltd (Paintworks) had operated a paint manufacturing business in the Adelaide suburb of
Edwardstown since 1935. Paintworks is a family company first set up by the grandfather of the current
directors. Patrick and Peter Paint are brothers and the grandsons of the company founder. Their father
retired 10 years ago after 45 years in the family business.. He was instrumental in bringing about
substantial growth in the company. Unfortunately (as can often be the case with the third generation),
his sons made some pretty bad business decisions which undermined the viability of the business and
they were ultimately forced to sell the business in 2006 to a major paint manufacturer with its main
production plants overseas. The purchaser was not interested in continuing the Australian paint
manufacturing operation. It simply wanted to control ( and ultimately remove from the marketplace a
company which had been, up to the time of the purchase, a formidable competitor). The purchaser of
the business bought the business but not the land and premises at Edwardstown which remained in the
ownership of Paintworks. The land is about 1200m2 in area and after the business ceased trading the
land and buildings remained vacant for some years.
In 2009 Paintworks sold the Edwardstown land to a company called ResiDense, which is a building
company specialising in low cost medium density residences for low income families. ResiDense
sought and obtained development approval (might change the whole answer to the below
questions) to construct 10 group dwellings on the land.
Two months ago ResiDense engaged contractors to undertake the site preparation works needed to
prepare the land for the building work. Those works included the demolition and removal of all existing
buildings on the land, the removal of concreted and bitumenised parking areas , the removal of a
number of asbestos clad buildings and the levelling of the site ready for the building work. In the course
of doing those works the contractors unearthed an old well. It had a very strong smell of paint and
solvent fumes. It is apparent that the well has been used as a dumping point for surplus paint and used
solvents. They also discovered an old underground liquid storage tank beneath the old paint products
storage building. The tank was heavily corroded and a fairly cursory inspection indicated that some
sort of liquid had obviously leaked from the tank into the surrounding soil. It also appeared from odour
and soil discolouration that the liquid had seeped for some distance through the soil. The contractors
bring these matters to the attention of ResiDense who are aware that recent changes to legislation in
SA have put in place stringent controls on site contamination.
What is the position of ResiDense in terms of liability for any contamination which may exist on the
land? -> Liable (EPA 1993, Pt 10A, Section 103E, Subsection 1) - the purchaser or transferee
is to be taken to have assumed the vendor's or transferor's liability for the site contamination
in accordance with the agreement and this Act applies as if the purchaser or transferee (and
not the vendor or transferor) had caused the site contamination or, as the case may be, the
specified part of the site contamination.

Will it restrict what ResiDense can do with the land? -> Yes, possible issues of Site contamination
assessment orders (Division 3, Section 103H) and Site remediation orders (Division 3,
Section 103J)
Would they be able to seek any compensation from the previous landowners? No
In looking at these matters consider the relevance of a number of provisions in Part 10A of the
Environment Protection Act, 1993. In particular it is suggested you consider:
1. Whether there is site contamination present? ( see Section 5B) Yes (Part 1, Section 5B,
Subsection 1), (a) chemical substances are present on or below the surface of the site
in concentrations above the background concentrations (if any); and (b) the chemical
substances have, at least in part, come to be present there as a result of an activity at
the site or elsewhere
2. Whether they have any statutory responsibility to notify the EPA about it?( see Section 83A)
Yes, thought of the consultants as the clients representative OR currently occupying
the land for development (Section 83A, Subsections 1 and 2) Consider in relation to this
point what the obligations are on consultants ( such as engineers) working for ResiDense who
might discover site contamination.
3. If site contamination is present who is responsible for dealing with it?( see provisions in Division
2 of Part 10A of Act) ResiDense (Section 103C, Subsection 1(b)(ii)(A)) - before the
person acquired the site, the person knew, or ought reasonably to have been aware,
that the activity that caused the site contamination at the site had been carried on at
the site, or while the person was the owner, the person knew, or ought reasonably to
have been aware, that the activity that caused the site contamination at the site was
being carried on at the site.
4. What powers are available to the EPA in relation to it?( see Section 103H and section 103J)
To issue Site contamination assessment orders (Section 103H) and Site remediation
orders (Section 103J), provided that the Authority is satisfied that site contamination
exists at a site

You may also like to give some consideration to:

1. The chances of ResiDense recovering any compensation from Paintworks? Low, if
Paintworks gave ResiDense a notice the person has first given the purchaser or
transferee a notice in a form approved by the Authority for the purposes of Section
103E Subsection 2 (a)(i) setting out the legal effect of the agreement under this
section
2. The potential liability of Paintworks and more particularly that companys directors.( consider
possible relevance of Section 103G) Section 103G, Subsection (1)(b) - there is reason
to believe that the body corporate is being or has been wound up, stripped of assets or
subjected to other action as part of a scheme (i) to avoid meeting its obligations
under or in connection with a site contamination assessment order or a site
remediation order in respect of the site; or (ii) to avoid its being issued with such an

order, then the ERD Court may consider Paintworks as an appropriate person to be
issued with a site contamination assessment order or a site remediation order, or both,
in respect of the site.
3. Whether the local council should have given development approval for a residential
development on land previously used for these purposes? In considering this point it would be
important to have regard to the contents of the Ministers Planning Advisory Notice No 20
published by Planning SA in December 2001 (attached ).
Consider also the case of Alec Finlayson Pty Ltd v Armidale City Council (1994) 51 FCR 378;
84 LGERA 225
See also Jan McDonald, Financial Liability for Contaminated Site Clean-ups-the increasingly
Strict Standard of Fault-based Liability (1994) 11 EPLJ 516
4. Whether a site contamination audit would be useful or necessary?( see Section 3 and Division
4 of Part 10A of Act)

Link
to
Environment
Protection
Act,
1993http://www.legislation.sa.gov.au/LZ/C/A/ENVIRONMENT%20PROTECTION%20ACT%201993.
aspx
See also Paper by Paul Leadbeter-Site Contamination requirements under the Environment
Protection Act,1993-What are they and what will be their effect? Originally drafted in 2010-now
published in Environmental and Planning Law Journal.
Paper is attached included in documents in MyUni.