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Court of Criminal Appeal 2 August 2019

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie

[2019] NSWCCA 174

Also reported as (2019) 101 NSWLR 245
Other
APPEAL AND REVIEW MEANING OF “WASTE” MEANING OF “ASBESTOS WASTE” WHETHER WASTE CONTAINED ASBESTOS SCHEDULED ACTIVITY STATUTORY EXCEPTION TO ONUS OF PROOF

Citation: Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2019] NSWCCA 174
Court: Court of Criminal Appeal
Date: 2 August 2019
Judge(s): Preston CJ of LEC at [1]; Davies J at [411]; Adamson J at [412]

Background

A company operating a sand extraction business received between 24,000 and 44,000 tonnes of material from Sydney recycling facilities, which it stockpiled on its licensed premises. Asbestos was detected in the stockpiles. The Environment Protection Authority prosecuted the company and its director for using land as a waste facility without lawful authority, contrary to section 144(1) of the Protection of the Environment Operations Act 1997 (POEO Act).

The trial judge in the Land and Environment Court found both defendants not guilty. Her Honour concluded that the stockpiled material was not "waste" within the statutory definition, that the stockpiling was not a scheduled activity (either waste disposal by application to land or waste storage), and that two resource recovery exemptions applied to remove any licensing requirement. She also found the offences were time-barred.

Before final orders were made, the EPA requested the trial judge to submit questions of law to the Court of Criminal Appeal under section 5AE of the Criminal Appeal Act 1912. The defendants contested whether that request was competent. The Court of Criminal Appeal answered the submitted questions, finding multiple errors of law in the trial judge's reasoning, and remitted the proceedings to the Land and Environment Court for redetermination.

Legal Issues

  • Whether the EPA's second, substantially different request for questions of law to be submitted under section 5AE was competent, and whether the EPA had waived its right to make that request
  • Whether a processed, recycled, re-used or recovered substance can constitute "waste" under paragraphs other than paragraph (d) of the definition in the Dictionary to the POEO Act
  • Whether depositing materials in stockpiles on land constituted "waste disposal by application to land" under clause 39 of Schedule 1 to the POEO Act
  • Whether temporary stockpiling of material constituted "waste storage" under clause 42 of Schedule 1 to the POEO Act
  • Which party bore the onus of proving lawful authority, including compliance with resource recovery exemptions, under section 144(2) of the POEO Act
  • Whether the trial judge adopted a correct approach to construing the notices of exemption granted under the Waste Regulation
  • Whether non-compliance with record-keeping conditions in the notices of exemption prevented the exemptions from applying
  • Whether waste "contains asbestos" only if the volume or proportion of asbestos exceeds some threshold
  • Whether the stockpiling was ancillary to an existing development consent or Part 3A approval
  • Whether the offences were continuing offences, and whether they were time-barred

Decision

Threshold Issue (competency of s 5AE request): The Court held that the EPA's request was competent. The obligation under section 5AE arises on request by the Crown before the completion of proceedings, and no final orders had been made when the request was lodged. The section does not limit the Crown to a single request or to a particular form of question, and delay in settling the final questions does not affect competency (at [80]-[86]). The defendants had not established waiver or abandonment (at [84]). The threshold question was answered: first part "yes," second part "no" (at [87]).

Issue 1 (Definition of "waste"): The Court held that the trial judge misconstrued the definition of "waste" in the Dictionary to the POEO Act. The paragraphs of the definition (a) to (e) are not mutually exclusive. A substance that is processed, recycled, re-used or recovered can constitute "waste" by falling within any one or more of paragraphs (a) to (e), not solely paragraph (d). The word "or" connecting the paragraphs does not create a hierarchy or render the paragraphs exclusive of each other, and the concluding sentence of the definition applies to all paragraphs (at [115]-[132]).

Issue 2 (Application to land and waste disposal): The Court held that neither paragraph (d) of the definition of waste nor clause 3B(1)(a) of the Waste Regulation creates an independent first question of whether a substance has been applied to land before the question of whether the application falls within a prescribed method. The prescribed methods in clause 3B(1)(a)(i) to (iii) define what constitutes application to land. On the facts found by the trial judge, depositing materials in stockpiles on Lot 8 satisfied the method of "depositing on the land" and therefore constituted application to land (at [153]-[157]). Similarly, the Court held that clause 39(1) of Schedule 1 does not permit a two-step inquiry: the label "waste disposal by application to land" is conclusively and exhaustively defined by the description that follows, and depositing waste received from off-site on the land was application to land within clause 39(1)(a) (at [170]-[173]).

Issue 3 (Waste storage): The Court held that the trial judge erred in excluding temporary stockpiling from the definition of "waste storage" in clause 42 of Schedule 1. The ordinary meaning of "storage" does not require permanence, and the statutory text expressly provides for "storage for transfer" and uses the phrase "at any time" in relation to volumes. The trial judge impermissibly introduced a purpose-based inquiry that had no foundation in the text of clause 42. On the facts found, the stockpiles contained more than 2,500 tonnes of material, satisfying clause 42(3)(c), and the activity necessarily fell within "waste storage" (at [187]-[197]).

Issue 4 (Onus of proof and lawful authority): The Court held that section 144(2) of the POEO Act creates a statutory exception, not merely a component of the offence description, so that the defendant bears the onus of proving lawful authority on the balance of probabilities. This onus extends to proving compliance with any exemption relied upon as the source of lawful authority. The trial judge erred in placing the onus on the EPA to negative the application of the exemptions (at [221]-[229]).

Issue 5 (Construction of notices of exemption): The Court held that the ordinary principles of statutory construction apply to notices of exemption granted under delegated legislation. The trial judge's "practical approach" led to departures from the plain text of the exemptions in three material respects: treating certain chemical and attribute requirements as not applying to consumers; substituting a subjective test for the objective criterion in condition 7.2.7(a); and reading the reference to "development consent" in condition 7.2.7(b) as extending to a Part 3A approval, which it does not (at [256]-[272]).

Issue 6 (Record-keeping conditions): The Court held that the trial judge erred in finding that non-compliance with record-keeping conditions in the exemptions did not prevent the exemptions from applying. The plain language of each notice of exemption makes compliance with all conditions in section 9 a prerequisite to the exemption applying. Because the trial judge found that Grafil had not kept the required records, the exemptions did not apply (at [286]-[295]).

Issue 7 (Asbestos waste): The Court held that the trial judge erred in treating whether waste "contains asbestos" as a matter of fact and degree depending on the volume or proportion of asbestos. The ordinary meaning of "contains" is to have as its contents or constituent parts, comprising or including asbestos, regardless of the amount. The same construction applies to the phrase in the definition of "excavated natural material" (at [323]-[329]).

Issue 8 (Ancillary use and development consent): The Court held that the trial judge erred in finding that the stockpiling was ancillary to either the 1977 development consent or the original Part 3A approval. There was no evidentiary foundation for either finding. The materials could not have been intended for the originally approved access road, which would already have been constructed years before the charge period commenced, and the concept of ancillary use cannot apply where the use of one parcel of land is said to be ancillary to the use of entirely separate and remote land (at [363]-[377]).

Issue 9 (Continuing offence and time bar): The Court held that the trial judge misdirected herself on both questions by focusing on whether "non-exempt waste" had been deposited. The exemptions operate on the character of the activity, not the character of the waste: material subject to an exemption remains "waste" regardless. The trial judge also failed to address whether the ongoing storage of waste in the stockpiles constituted a continuing offence, which was a constructive failure to exercise jurisdiction (at [388]-[394], [407]-[408]).

Orders Made

  • The Court answered the submitted questions as stated at paragraph [410] of the judgment.
  • The Land and Environment Court is to redetermine the proceedings in accordance with the answers given to the submitted questions by the Court of Criminal Appeal.

Key Takeaways

  • The paragraphs of the definition of "waste" in the Dictionary to the POEO Act are not mutually exclusive. A processed, recycled, re-used or recovered substance can constitute waste under any one or more of paragraphs (a) to (e), not solely paragraph (d), and the 2005 amendment inserting paragraph (d) expanded rather than restricted the definition's scope (at [115]-[132]).

  • Under section 144(2) of the POEO Act, the defendant bears the onus of proving lawful authority to use land as a waste facility, including the onus of establishing that a resource recovery exemption applies and that all conditions of the exemption have been met. Compliance with exemption conditions is not a matter the prosecutor must negative (at [221]-[229]).

  • Notices of exemption granted under regulations are subject to ordinary statutory construction principles. A "practical approach" to construction does not permit a court to rewrite the plain language of an instrument or substitute a subjective test where the instrument imposes an objective one (at [256]-[272]).

  • Breach of a mandatory condition of a resource recovery exemption, such as a record-keeping requirement expressed as a prerequisite for the exemption to apply, causes the exemption to cease to apply entirely. A separate criminal penalty for breach of the condition does not displace this consequence (at [286]-[295]).

  • Whether waste "contains asbestos" for the purposes of the definition of "asbestos waste" in clause 50(1) of Schedule 1 to the POEO Act is not a question of degree or proportion. Waste contains asbestos if asbestos is present as a constituent part or content, regardless of the volume or relative proportion of asbestos to the total material (at [323]-[329]).

Legislation and Cases Referenced

Legislation
- Crimes Act 1900
- Criminal Appeal Act 1912 s 5AE
- Environmental Planning and Assessment Act 1979 s 4.2
- Evidence Act 1995
- Protection of the Environment Operations (Waste) Regulation 2005 cll 3A, 3B, 51, 51A
- Protection of the Environment Operations (Waste) Regulation 2014
- Protection of the Environment Operations Act 1997 ss 5, 48, 88, 144, 169, 216, 258, 286, Sch 1 cll 1, 39, 40, 41, 42
- Protection of the Environment Operations Amendment Act 2005
- Waste Avoidance and Resource Recovery Act 2001

Cases
- 4nature Incorporated v Centennial Springvale Pty Ltd (2017) 95 NSWLR 361; [2017] NSWCA 191
- Australian Gaslight Co v The Valuer General (1940) 40 SR (NSW) 126
- Australian Tea Tree Oil Research Institute v Industry Research and Development Board (2002) 124 FCR 316; [2002] FCA 1127
- Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139
- Baulkham Hills Shire Council v O’Donnell (1990) 69 LGRA 404
- Chugg v Pacific Dunlop Ltd (1990) 170 CLR 249; [1990] HCA 41
- CIC Insurance Limited v Bankstown Football Club Ltd (1997) 187 CLR 384; [1997] HCA 2
- Commissioner of Taxation v Industrial Equity Ltd (2000) 98 FCR 573; [2000] FCA 420
- Director of Public Prosecutions v United Telecasters Sydney Ltd (1990) 168 CLR 594; [1990] HCA 5
- Dowling v Bowie (1952) 86 CLR 136; [1952] HCA 63
- Electricity Trust of South Australia v Krone (Australia) Technique Pty Ltd (1994) 51 FCR 540
- Environment Protection Authority v Ampol Ltd (1993) 81 LGERA 433
- Environment Protection Authority v Bathurst City Council (1995) 89 LGERA 79
- Environment Protection Authority v Foxman Environmental Development Services Pty Ltd [2015] NSWLEC 105
- Environment Protection Authority v Hardt (2006) 148 LGERA 61; [2006] NSWLEC 438
- Environment Protection Authority v Land and Environment Court (NSW) (2004) 134 LGERA 140; [2004] NSWCA 50
- Environment Protection Authority v Terrace Earthmoving Pty Ltd (2013) 84 NSWLR 679; [2013] NSWCCA 180
- Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) (2016) 217 LGERA 222; [2016] NSWLEC 50
- Ex parte McGavin; Re Berne (1946) 46 SR (NSW) 58
- Foodbarn Pty Ltd v Solicitor General (1975) 32 LGRA 157
- Gill v Donald Humberstone & Co Ltd [1963] 3 All ER 180
- Hardt v Environment Protection Authority (2007) 156 LGERA 337
- IMF (Australia) v Sons of Gwalia Ltd (2005) 143 FCR 274
- Mouawad v Hills Shire Council (2013) 199 LGERA 28; [2013] NSWLEC 165
- Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
- Pullen v Smedley [2017] NSWSC 1721
- Shannongrove Pty Ltd v Environment Protection Authority (2013) 84 NSWLR 668; [2013] NSWCCA 179
- Sharp Corp of Australia Pty Ltd v Collector of Customs (1995) 59 FCR 6
- Sherritt Gordon Mines Ltd v Federal Commissioner of Taxation [1977] VR 342
- State of Western Australia v Minister for Aboriginal and Torres Strait Islander Affairs (1994) 49 FCR 507
- Talay v R [2010] NSWCCA 308
- The Ombudsman v Moroney [1983] 1 NSWLR 317
- Tovir Investment Pty Ltd v Waverley Council [2014] NSWCA 379
- Vines v Djordjevitch (1955) 91 CLR 512; [1955] HCA 19
- Wingecarribee Shire Council v De Angelis [2016] NSWCA 189
- Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5) [2013] NSWLEC 68
- Wong v Minster for Immigration and Multicultural and Indigenous Affairs (2004) 204 ALR 722