The High Court has ruled that section 57 of the Waste Management Act 1996 does not permit a general “fallback” order against a company’s directors or shareholders when the company cannot comply with a primary order. The ruling decided a preliminary point of law in proceedings brought by the Environmental Protection Agency; it did not determine the underlying claims for environmental relief.
The case concerns whether a court can make such an order under the waste legislation. The EPA’s application seeks orders and declarations under section 57 against seven respondents: Neiphin Trading Ltd, Dean Waste Company Ltd, Jenzsoph Ltd, Anthony Dean, Keith Cairns, Thady Nealon and Samuel Stears. The fourth to seventh named respondents asked the court to reconsider an earlier High Court decision, Wicklow County Council v Fenton (No 2), which had recognised the possibility of fallback orders under sections 57 and 58. The EPA argued that Fenton and later decisions should be followed.
Mr Justice John Edwards said a court should be slow to depart from a decision of equal jurisdiction. He nevertheless concluded that Fenton’s interpretation went beyond what the legislation could bear. He accepted that EU waste law requires costs to be borne according to the “polluter pays” principle, and that the principle is binding where incorporated into relevant directives. But he found that the directives did not specifically require a system of fallback orders against directors or shareholders.
The judge said section 57 authorises orders against a person holding, recovering or disposing of waste. Reading the Act as a whole, he found no express provision extending that civil power to company directors when the company cannot comply. He also noted that section 9 expressly provides for certain directors and officers to be criminally liable alongside a company, while the Act contains no corresponding provision for civil liability under section 57.
The judgment distinguished that proposed general power from the courts’ existing, limited ability to lift the corporate veil where a company is used for a fraudulent or improper purpose or to frustrate the court’s process. The judge said that exceptional jurisdiction did not arise from section 57 and did not establish the broader power argued for by the EPA.
The court answered the preliminary question in the negative: section 57 does not confer a blanket jurisdiction to make fallback orders against directors or shareholders merely because a company cannot comply with a primary order. The judgment addresses that statutory question only; it does not decide whether any respondent caused pollution or what other relief may be available in the underlying proceedings.