Always Recycling Pty Ltd v Environment Protection Authority

Land and Environment Court (NSW)|2012-04-18

Judgment 1This is an appeal under s287 of the Protection of the Environment Operations Act 1997 (the POEO Act) against the deemed refusal of an application made by Always Recycling Pty Ltd (Always) for the transfer of Environment Protection Licence No 13198 (the EPL) from Number 1 Excavation and Demolition (NSW) Pty Ltd (No 1). 2The EPL authorises No 1 to carry out scheduled activities, being waste storage and waste processing, at 191 Miller Road Chester Hill (the site). Always leases the site and is in occupation of the site. 3The EPL was granted to No 1 on 21 December 2009. At that time Mr Nasser Matta was sole director of No 1. An external administrator was appointed to No 1 in December 2010 and a liquidator was appointed in January 2011. Mr Matta is the sole director of Always. The application for transfer of the EPL was made in August or September 2011.

Issues 4The issues in dispute between the parties have narrowed during the course of the proceedings. The respondent (EPA) initially contended in its Statement of Facts and Contentions filed on 1 January 2012 that the appeal should be dismissed as Always is not a fit and proper person within the meaning of s 45(f) and s 83 of the POEO Act, on the basis that Mr Matta as sole director of both No 1 and Always had contravened environment protection legislation and has a poor record of compliance with environment protection legislation; that information requested had not been provided; that Mr Matta is not of good repute (s 83(2)(g)); and that Always had not demonstrated the financial capacity to comply with its obligations under the EPL. In the alternative, the EPA contended that subject to Always providing financial records demonstrating that it has the financial capacity to comply with its obligations under the EPL, that the EPL be transferred subject to conditions. 5The EPA's Further Amended Statement of Facts and Contentions filed on 13 April 2012 contends that the appeal should be dismissed on the ground that Always is not a fit and proper person within the meaning of s 45(f) and s83 of the POEO Act because it has not demonstrated the financial capacity to comply with its obligations under the licence, that being a relevant consideration under s 83(2)(m) of the Act. The Further Amended Statement of Facts and Contentions states that while the EPA does not press any other subsection of s83 as a basis for refusing transfer of the licence, it submits that the considerations outlined in s 83 are relevant to determination of the question of how the proposed transfer of the licence should occur. 6During the course of the hearing further information was provided concerning the financial position of Always, and the EPA no longer presses its contention relating to s 83(2)(m) of the Act. 7The EPA's position at the conclusion of the hearing was that in light of what it describes as Mr Matta's poor record of compliance with environmental and planning obligations as director of No 1 and Always, subject to Always providing financial records demonstrating that it has financial capacity to comply with its obligations under the licence, the licence can be transferred subject to conditions. Those conditions relevantly include specification of the maximum volume of waste that can be on the site, and a restriction on the right of Always to receive waste for processing until removal of asbestos contaminated waste presently on the site, and reduction in the other waste on the site. 8Always had originally contended that the EPL should be transferred subject to the existing conditions. At the conclusion of the hearing Always and the EPA had agreed to some of the proposed conditions. Always opposes the condition specifying the maximum volume of waste, and seeks to rely on a Waste Reduction Plan under which it could receive waste while removing the asbestos contaminated waste and reducing the other stockpiles. The parties are in dispute as to the amount of a financial assurance to be provided to the EPA.

Statutory context 9Chapter 3 of the Act contains the provisions for Environment Protection Licences. Under s48 it is an offence for the occupier of premises to carry on any scheduled activity unless the person is the holder of a licence that authorises that activity. Schedule 1 to the Act includes as scheduled activities "waste storage" and "waste processing (non-thermal treatment)" above a specified scale. 10Pursuant to s 54(1) of the Act an application may be made for the transfer of a licence to another person, and s 55 confers the power to transfer an EPL. Part 3.5 contains particular conditions that can be attached to a licence, and s63 provides that nothing in Part 3.5 prevents other conditions being attached to a licence. It was common ground that conditions attached to a licence are prospective, rather than retrospective, in nature. 11Section 45 provides the matters that the appropriate regulatory authority is required to take into account in exercising functions under Chapter 3: 45 Matters to be taken into consideration in licensing functions In exercising its functions under this Chapter, the appropriate regulatory authority is required to take into consideration such of the following matters as are of relevance: (a) any protection of the environment policies, (b) the objectives of the EPA as referred to in section 6 of the Protection of the Environment Administration Act 1991, (c) the pollution caused or likely to be caused by the carrying out of the activity or work concerned and the likely impact of that pollution on the environment, (d) the practical measures that could be taken: (i) to prevent, control, abate or mitigate that pollution, and (ii) to protect the environment from harm as a result of that pollution, (e) any relevant green offset scheme, green offset works or tradeable emission scheme or other scheme involving economic measures, as referred to in Part 9.3, (f) whether the person concerned is a fit and proper person (as referred to in section 83), (f1) in relation to an activity or work that causes, is likely to cause or has caused water pollution: (i) the environmental values of water affected by the activity or work, and (ii) the practical measures that could be taken to restore or maintain those environmental values, (g) in connection with a licence application relating to the control of the carrying out of non-scheduled activities for the purpose of regulating water pollution-whether the applicant is the appropriate person to hold the licence having regard to the role of the applicant in connection with the carrying out of those activities, (h) in connection with a licence application-any documents accompanying the application, (i) in connection with a licence application-any relevant environmental impact statement, or other statement of environmental effects, prepared or obtained by the applicant under the Environmental Planning and Assessment Act 1979, (j) in connection with a licence application-any relevant species impact statement prepared or obtained by the applicant under the Threatened Species Conservation Act 1995 or Part 7A of the Fisheries Management Act 1994, (k) in connection with a licence application, any waste strategy in force under the Waste Avoidance and Resource Recovery Act 2001, (l) in connection with a licence application: (i) any public submission in relation to the licence application received by the appropriate regulatory authority under this Act, and (ii) any public submission that has been made under the Environmental Planning and Assessment Act 1979, in connection with the activity to which the licence application relates, and that has been received by the appropriate regulatory authority, (m) if the appropriate regulatory authority is not the EPA-any guidelines issued by the EPA to the authority relating to the exercise of functions under this Chapter. 12Section 83 of the Act, referred to in s 45(f), provides: 83 Fit and proper persons (1) This section has effect in determining whether a person is a fit and proper person as referred to in section 45 (f) and section 79 (5) (f), but does not limit the generality of those sections. (2) The appropriate regulatory authority may take into consideration any or all of the following: (a) that the person has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation, (b) that, if the person is a body corporate, a director of the body corporate: (i) has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation, or (ii) is or has been the director of another body corporate that has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation, (c) the person's record of compliance with the environment protection legislation, (d) if the person is a body corporate, the record of compliance with the environment protection legislation of any director or other person concerned in the management of the body corporate, (e) whether, in the opinion of the appropriate regulatory authority, the management of the activities or works that are or are to be authorised, required or regulated under the relevant licence are not or will not be in the hands of a technically competent person, (f) whether, in the opinion of the appropriate regulatory authority, the person is of good repute, having regard to character, honesty and integrity, (g) if the person is a body corporate, whether, in the opinion of the appropriate regulatory authority, a director or other person concerned in the management of the body corporate is of good repute, having regard to character, honesty and integrity, (h) whether the person, in the previous 10 years, has been convicted in New South Wales or elsewhere of an offence involving fraud or dishonesty, (i) if the person is a body corporate, whether a director or other person concerned in the management of the body corporate has, in the previous 10 years, been convicted in New South Wales or elsewhere of an offence involving fraud or dishonesty, (j) whether the person, during the previous 3 years, was an undischarged bankrupt or applied to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounded with his or her creditors or made an assignment of his or her remuneration for their benefit, (k) if the person is an individual, whether he or she is or was a director or person concerned in the management of a body corporate that is the subject of a winding up order or for which a controller or administrator has been appointed during the previous 3 years, (l) if the person is a body corporate, whether the body corporate is the subject of a winding up order or has had a controller or administrator appointed during the previous 3 years, (m) whether the person has demonstrated to the EPA the financial capacity to comply with the person's obligations under the licence or the proposed licence, (n) whether the person is in partnership, in connection with activities that are subject to a licence or licence application, with a person whom the appropriate regulatory authority does not consider to be a fit and proper person under this section, (o) any other ground prescribed by the regulations. (3) A reference in subsection (2) to a director of a body corporate extends to a person involved in the management of the affairs of the body corporate. (4) Without limiting the generality of the above, the appropriate regulatory authority may disregard contraventions referred to in subsection (2) having regard to the seriousness of the contraventions, the length of time since they occurred, and other matters that appear relevant to the appropriate regulatory authority. (5) For the purposes of this section, other relevant legislation is any legislation declared by the regulations to be other relevant legislation for the purposes of this section. The regulations may so declare legislation that has been repealed or legislation of a place outside the State. 13Section 50(2) of the Act provides that if development requires development consent (referred to as "controlled development"), a licence cannot be granted or varied unless development consent has been granted. The reference to "development consent" includes a project approval under Part 3A of the Environmental Planning and Assessment Act 1979 (the EPA Act).

Planning approval 14On 27 February 2007 the Minister for Planning granted a Project Approval to CMA Corporation under s75J of the EPA Act for a materials processing facility on the site, to process no more than 100,000 tonnes of metal per year. In June 2009 the Minister approved a modification application. The terms of the modified Project Approval granted to No 1 included a requirement in Sch 2 condition 2 that the proponent carry out the project generally in accordance with the Environmental Assessment submitted with the original application, the modification application and the accompanying Environmental Assessment report, and the conditions of the approval. 15The Environmental Assessment submitted with the original application was titled Environmental Assessment to Accompany a Major Projects Application for a Materials Recycling Facility, 191 Miller Road, Chester Hill, dated November 2006 and prepared by BBC Consulting Planners. The Environmental Assessment submitted with the modification application was Modification of the Chester Hill Materials Recycling Facility (06_MOD1) to include the Recycling of Additional Types of Material dated February 2009. 16The conditions of the modified Project Approval include Sch 2 condition 4, limiting processing to no more than 100,000 tonnes of building and construction waste including metal per year, and condition 5, requiring the proponent to obtain an EPL for the project. Schedule 3 condition 3 provides: The proponent shall ensure that the height of stockpiles of unprocessed or baled materials do not exceed 3m. 17Schedule 3 condition10 requires the proponent to prepare, and following approval, implement, a revised Stormwater Management Plan. It was agreed that the plan entitled Materials Recycling Facility for Number 1 Demolition and Excavation Pty Ltd at Lot 8, DP 1039882, 191 Miller Road Chester Hill NSW 2162 - Stormwater Management Plan dated 1 September 2009, prepared by Emerson Associates Pty Ltd (the SMP) was approved. The SMP (exhibit 12, tab 6) includes a General Arrangement Plan dated 31 August 2009 identified as SW01 (the General Arrangement Plan). That plan shows acoustic barriers of varying heights, drive over mounds, internal access roads, three recycle yards, and proposed pollution control works. Details of those proposed pollution control works are provided in Site Plan Sheet 1, and include a ramp up to separate clean and dirty areas, a truck wash and primary sediment trap for dirty area runoff, a solenoid or float valve to maintain truck wash water level, a fine sediment trap, and an Ecosol RSF 4600 pollution control device. The Catchment Plan Stormwater Notes (SW02) plan shows the "dirty" area enclosed by acoustic walls and drive-over mounds, pollution treatment facilities at the low point of the "dirty" area of the site, and "clean" areas discharge to existing inlets. 18On 6 July 2011 Always requested modification of the Project Approval to allow for the permanent use of shipping containers as a noise control around the processing areas and perimeter of the site. That application is currently under consideration by the Department of Infrastructure and Planning.

EPL No 13198 19EPL 13198 was issued to No 1 subject to conditions, including standard conditions. Condition L4 Volume and mass limits states "Not applicable". Condition l5.1 lists the types of wastes that can be received, being Building and demolition waste; Virgin excavated natural material (VENM); Asphalt waste; Garden waste; Wood waste; and General or Specific exempted waste, being a reference to waste that meets the conditions of a resource recovery exemption under cl 51A of the Protection of the Environment Operations (Waste) Regulation 2005 (the Waste Regulation). 20Condition L5.2.1 provides: The height of any stockpile of any material (whether of waste or any other materials) on the premises, where any part of that stockpile is within eight (8) metres of the southern boundary must not exceed 24.24 metres AHD. The height of any stockpile of any material (whether of waste or any other materials) on the premises, where any part of that stockpile is within eight (8) metres of the north east boundary must not exceed 26.21 metres AHD. The height of any other stockpile must not exceed 26.00 metres AHD. 21Condition L7.1 provides in relation to asbestos that the licensee must comply with the conditions specified in the licence, or where no specific condition is outlined, with the Waste Regulation.

Evidence 22The appeal was the subject of a conciliation conference under s 34 of the Land and Environment Court Act 1979 conducted on site on 5 March 2012. The parties did not reach agreement and the conciliation was terminated. The parties consented to my hearing and determining the matter, and for the evidence of the site view and during the conciliation conference to be evidence in the proceedings. 23Always relied on affidavit and oral evidence from Mr Nasser Matta, and Mr Andrew Schlick, its Operations Manager. Mr Angelo Russo, accountant and auditor, participated in a conference with Mr John Acheson, Waste Levy Compliance Officer, EPA, and they provided a joint report on the financial position of Always. 24The EPA relied on affidavit evidence from its officers Ms Christine Mitchell, Mr Alex Bourne, Ms Jacqueline Ingham, Ms Belinda Lake and Mr Trevor Wilson, relating to inspections of the site; and affidavit evidence from Mr Robert Hogan, Manager Waste Operations, and Mr Stephen Beaman, Acting Director Waste and Resource Recovery. Mr Hogan and Mr Beaman gave oral evidence. 25The EPA's bundle of documents (exhibit 12) included documents relating to the record of compliance by No 1, and regulatory action taken by the EPA in the form of the issuing of Clean Up Notices, Penalty Notices, and Official Cautions between 2 September 2009 to 28 February 2011. Always objected to the admission of that evidence on the basis that since the EPA had abandoned its reliance on the fit and proper requirements as set out in s83 of the Act, evidence in the form of notices issued and affidavits sworn by officers of the EPA as to events during the period when No 1 operated the site should not be admitted. The EPA submitted that this evidence was relevant to consideration of the conditions that should be imposed on the EPL if it is transferred to Always. For the reasons given orally I determined that having regard to the common directorship, evidence going to past management of the site while operated by No 1 may be relevant in determining appropriate conditions for the future operation of the site by Always. Evidence in the form of observations by officers of the EPA, and as to the issuing of penalty notices and other notices, would not be admitted to establish whether any offences were committed by No 1, but rather to identify whether there were past management issues that should be addressed in conditions, as contended in the EPA's Statement of Facts and Contentions. The documentary and affidavit evidence was admitted.

The site and its operation 26The EPA's evidence includes surveys of the site showing detail, levels and contours as at 28 September 2009, 1 May 2011, 6 September 2011, 23 February 2012 (exhibit 12, tabs 66, 85, 93, 95). Those surveys record that over this period of time the area occupied by each stockpile has changed, and the volume of material, and the area and height of the stockpiles of material, has increased. 27Two survey plans, dated 6 September 2011 and 23 February 2012, were the subject of discussion between Mr Hogan and Mr Schlick. Those plans, with handwritten notations, are exhibit 13. Mr Schlick explained that he and Mr Hogan had recorded the RLs for the stockpiles and compared those with the heights of stockpiles as specified in condition L5.2.1. On the survey plan dated 6 September 2011, the stockpile (described as Dirt & Topsoil) at the north east corner of the site is RL 37; at the south (Wood chip & Soil), RL 28, and the stockpile comprising Raw Timber & Wood Chip, Sorting Waste, and Brick & Concrete at the west is RL 29. On the survey plan dated 23 February 2012, the heights of the north east stockpile is RL 31, and the west varies between RL 27 and 28. 28Always proposes a revised site layout in a plan "Proposed Yard Layout", dated 12 March 2012 (exhibit 12, tab 52), which shows container walls, proposed concrete jersey barriers separating waste from the roadways, and a proposed truck wash on the north west side of the site. 29Always also proposes a Waste Reduction Plan dated 15 March 2012 (exhibit 12, tab 53) (WRP), which provides: (a) removal of the asbestos stockpiles in the north east corner of the site (estimated quantity 2,863 cubic metres) and the south corner of the site (estimated quantity 4,750 cubic metres) within 30 days from the date of transfer of an EPL (cl 2.2); (b) reduction of other unprocessed waste stockpiles to a maximum height of 3m above ground level by reducing and processing into saleable material over varying periods from 60 days to 180 days from the transfer of an EPL, and removal and disposal of sorting waste at Blacktown Waste within 180 days (cl 2.3); (c) a restricted tonnage limit for a period of six months, with the objective of reducing current stockpile heights to a maximum of 3m above ground level. Estimated maximum volume input and volume output for the periods 0-60 days, 61-120 days and 121-180 days after transfer of an EPL are provided (cl 2.3); and (d) maintaining stockpiles to a maximum height of 3m above ground level, including monitoring of receipt of materials (cl 3.1). 30In his affidavit (exhibit C) Mr Matta outlined the background to the Part 3A Project Approval granted to No 1, noting that as a result of the amendment to the Project Approval issued to No 1 in June 2009, metal now comprises only 20 percent of the volume of the material processed on site. Always has applied for a further modification to permit the permanent use of the shipping containers on the site for noise reduction instead of the installation of acoustic barriers; the containers are presently being used as a temporary measure. Mr Matta outlined the history of steps taken to transfer the EPL from No 1 to Always, including details of correspondence and meetings with EPA officers. Mr Matta provided details of No 1's responses to the regulatory action taken by the EPA, including the Clean Up Notices issued in respect of the southern stockpile and the north eastern stockpile. Mr Matta stated that the asbestos contaminated stockpiles were dumped "a very long time ago", and that "Number 1 didn't accept the asbestos, but found some pieces in the entire stockpile. This was an accident". Mr Matta stated that the asbestos stockpiles have not been removed because Always has not been able to trade for over a year and has been unable to generate the cashflow to remove them. Not having an EPL affects his ability to remove the waste. 31Mr Matta stated that Always is entitled to dispose of waste from the site without having an EPL. To get rid of the asbestos waste will cost somewhere between $250,000-$400,000 including the cost of waste classification and proper disposal in accordance with relevant legislation and standards. Always has attempted to reduce stockpile heights (other than the asbestos stockpiles) by disposing of some waste at Blacktown Waste; this is expensive and defeats the point of recycling the waste as would be the case when the site is operational. 32Mr Matta stated that the material in the existing stockpiles cannot be processed without a licence which authorises trading and processing. It otherwise costs Always $150 per tonne to dispose of that waste at other facilities as general waste instead of recycling that material. Always will not be able to commercially operate if the facility remains shut while the asbestos stockpiles are disposed of and the waste reduced to 3 m. Always receives approximately $170 per tonne for incoming waste. Always proposes to operate the facility, begin accepting waste, processing materials on-site into recyclable material, and then begin selling those materials. In oral evidence Mr Matta stated that Always would make $20-$30 per tonne on average for the sale of processed material. 33Mr Matta provided details of stormwater management, stating that Always has purchased a superior wash bay system that can be installed once the licence is transferred; if the licence is transferred Always will undertake any outstanding concreting outlined in the revised stormwater documents. Always has developed a revised site layout which incorporates shipping containers, indicates road widths, cell areas, and proposed concrete jersey barriers. Always now proposes a dedicated central processing area allocated for the processing of all materials brought onto the site, with processed materials being placed into bays before being moved away and another unit being moved into place to process additional products. Permanent barriers of fixed concrete walls will be installed at the southern boundary of the site for storage of processed materials. Always intends to install other moveable concrete barriers to demark cell areas. 34In oral evidence Mr Matta stated that the requirements of the SMP are in place with the exception of the wash bay. The rest of the pipe work is in. Mr Matta was questioned about the provision for rollover mounds and walls, and he stated that the dirty water is still contained. Trucks are washed at the back driveway so they do not carry dirt out. The water stays within the site and does not leave it. The staff control sediment by hay bales, and no rubbish has flooded on to the roads or from one pile to another even with recent heavy rain. There are kerbs around the whole site and the containers contain the water on the site. He is committed to upgrading the stormwater and has purchased a truck wash which is better than the one specified in the SMP. 35Mr Matta was questioned about the WRP. Mr Matta's evidence was that this plan is sufficient to bring the site into compliance, subject to the weather and normal working procedures. The WRP provides (Table, p5) for maximum tonnage to be delivered to the site per operational day and the maximum tonnage output via sale of processed waste or removal per operational day. Mr Matta agreed that this table does not specify the minimum to be removed, however he relied on the specification in 2.2 and 2.3 of the WRP of the amount of waste to be removed. Mr Matta was confident the waste could be removed within the time frame. Receiving waste is where the cash flow is, and once it is sorted the profit goes back into the business. There are 30 staff now and that would double if the EPL is transferred. 36Mr Schlick is the Operations Manager of Always. In his affidavit (exhibit D) he states that he was employed on 10 February 2011 by Always to assist Mr Matta with dealings with the EPA and to develop a framework for the more efficient management of the site. In oral evidence Mr Schlick stated that after he was employed he took steps to re-establish control measures on the site, increase measures relating to dust, and work on trying to build a relationship with the EPA and the neighbours. He vetted and removed non-performing staff and employed new staff with better experience. He has tried to reduce the stockpile height. He is not aware of any penalty notices, clean up notices or any notices issued since he was employed. Mr Schlick was questioned about the table at p 5 of the WRP and stated that the time it takes to process waste depends on the type of waste. Mr Schlick was confident the asbestos stockpile can be removed and the other piles reduced to 3m while processing work is going on. Mr Schlick agreed that a significant amount of the stockpiles would need to be removed in order to comply with the new site layout including roadways and 3 m height limit. Mr Schlick was not familiar with the SMP. Mr Schlick stated that he makes the decisions on a daily basis; Mr Matta is responsible for the stockpiles not having been reduced to 3m.

Compliance action by the EPA 37The record of compliance by No 1 with the requirements of the POEO Act, the EPL, the Project Approval, and the statutory notices issued by the EPA, are outlined in the EPA's Further Amended Statement of Facts and Contentions (exhibit 2), and summarised in the affidavit of Mr Stephen Beaman (exhibit 9). Mr Beaman notes (at [19] and [20] of his affidavit) that No 1 commenced operating a waste facility at the site in 2009 without being authorised by an EPL contrary to s48 of the POEO Act, and without having had approval for a number of plans as required under the Project Approval. The EPA had issued No 1 with six Penalty Notices, three Official Cautions, and three Clean Up Notices. The Clean Up Notices and Penalty Notices were as follows: Clean Up Notices 1105913 2 September 2009 1113830 17 May 2010 1114514 4 August 2010 Penalty Notices 3029620220 4 January 2010 3029620230 14 January 2010 3029621201 17 September 2010 3029621210 17 September 2010 3029621257 8 October 2010 3029621459 28 February 2011 38The Clean Up Notice issued on 2 September 2009 and Penalty Notices issued on 14 January 2010 related to a site inspection undertaken on 27 August 2009 where officers observed stockpiles of waste material including stockpiles of soil material above 3m; material lying in drainage lines leading to the stormwater system; stockpiles of mixed timber waste including a stockpile of garden waste mixed with timber; and a diesel tank contained in a shipping container that was not bunded. At that time No 1 did not hold an EPL. The Clean Up Notice (exhibit 12, tab 11) directed No 1 to cease receipt of waste, cease processing of waste, reduce the height of stockpiles, remove sediment mud or dust from drainage lines leading to stormwater drains, engage a suitably qualified contractor to test stockpiles in the eastern corner for the presence of any asbestos fibre materials, and provide copies of a revised Stormwater Management Plan and Emergency Plan for the premises. The Penalty Notices (exhibit 12, tab 14) were issued in relation to the transport of waste to the site between 13 July 2009 and 27 August 2009 and use of the site as a waste facility between 13 August 2009 and 27 August 2009 when No 1 did not have an EPL, in breach of ss 143 and 144 of the POEO Act. 39The Clean Up Notice issued on 17 May 2010 related to a site inspection on 15 April 2010, where officers observed a stockpile located in a central southern location on the site, 5 to 6 m high, consisting of soil with rubble, bricks and concrete and garden waste which appeared to be contaminated with asbestos cement sheeting debris; subsequent laboratory testing confirmed that four of the five samples collected contained asbestos. The Notice (exhibit 12, tab 20) required No 1 to cease stockpiling, applying, removing or disposing of waste from that stockpile and restrict access to it with fencing and appropriate signage, provide details of any movement, blending or processing that had occurred to the stockpile including details of vehicles that have transported waste and addresses where any of the material from that stockpile had been transported; survey the stockpile; and provide a waste classification report. 40The Clean Up Notice issued on 4 August 2010 related to a site inspection on 13 May 2010 where officers observed a stockpile in the north eastern section of the site approximately 3m high consisting of soil with rubble, bricks and concrete which appeared to be contaminated with asbestos cement sheeting debris; subsequent laboratory testing confirmed that four of the four samples collected contained asbestos. On a further site inspection on 5 July 2010 officers observed that waste material had been added to the stockpile. The Notice (exhibit 12, tab 24) was in similar terms to the Notice issued on 17 May 2010, and included a direction to remove all waste from that stockpile to a place that could lawfully accept that type of waste and provide receipts dockets and invoices of the removal transport and disposal of each load of waste from that stockpile. A Penalty Notice for failure to comply with this Clean Up Notice was issued on 28 February 2011, after No 1 was in liquidation (exhibit 12, tab 35). 41The two Penalty Notices issued on 17 September 2010 related to receipt of acid sulphate soils between 29 January 2010 and 30 January 2010, in breach of ss 143 and 144 of the POEO Act (exhibit 12, tab 26). The EPA issued an Official Caution on 17 September 2010 in relation to the response provided by No 1 to a notice issued under s191 of the POEO Act requiring information and records in relation to the transport of material including the acid sulphate soil (exhibit 12, tab 27). 42The Penalty Notice issued on 8 October 2010 (exhibit 12, tab 28) related to receipt of foundry sand waste between 22 April and 23 April 2010 in breach of s 144 of the POEO Act. The EPA issued an Official Caution on 8 October 2010 (exhibit 12, tab 29) for breach of s211 of the POEO Act in relation to information provided in response to a notice under s191 of the POEO Act relating to the receipt of foundry sand waste. 43The EPA issued a written warning on 10 February 2010 (exhibit 12, tab 15) for failure to comply with condition 03.2 of the EPL on 1 February 2010 in relation to dust emissions (tab 15). 44In its Statement of Facts and Contentions (exhibit B), Always responded to the summary of regulatory action as provided by the EPA. Mr Matta outlined in his affidavit (exhibit C, pp 11-15) his recollection of the Official Cautions, Penalty Notices and Clean Up Notices and No 1's responses, and he exhibited copies of correspondence. In relation to the Penalty Notices issued on 14 January 2010, Always states that while the notices were sent, Always had not received a response to its request made on 12 March 2009 for confirmation whether a licence was required. Mr Matta notes that the Penalty Notices were paid and no further action was taken. Mr Matta states that the Penalty Notices issued on 17 September 2010 were paid and no further action was taken; at the time No 1 was informed that the material was classified as concrete and the material had the appearance of dust. In relation to the Penalty Notice issued on 8 October 2010, No 1 had advised the EPA on 6 August 2010 that it had been informed at the time it was notified of the job that the material was classified as VENM sand; two managers did a visual inspection and allowed the material into the site without a waste classification report; and as a result of procedures not being followed correctly the two managers involved were dismissed. 45The Clean Up Notice issued on 17 May 2010 was originally issued in relation to a southern stockpile and was varied by the EPA, and was the subject of correspondence between No 1 and the EPA over a long period of time. Mr Matta states that No 1 complied with the terms of the Notice "at all times before the company went into liquidation". The Clean Up Notice issued on 4 August 2010 for the north east stockpile was the subject of correspondence between No 1 and the EPA; Mr Matta states that No 1 "complied with the terms of the Notice at all times before the company went into liquidation". 46Mr Matta stated that in relation to the Official Caution issued on 10 February 2010 for breach of condition 03.2 of the EPL due to observation of a dust cloud at the site, Always has a full tonne water cart to deal with dust; and no further action was taken. In relation to the Official Caution issued on 17 September 2010, Mr Matta states that No 1 had provided a summary of all loads recorded for 25 January 2010 to 5 February 2010 and advised that it needed to re-enter all weighbridge data for this period; weighbridge dockets were provided to the EPA on 15 June 2010. In relation to the Official Caution of 8 October 2010, Mr Matta states that No 1 had written to the EPA advising that it had never taken loads from the relevant site, and once the EPA had provided details of the relevant company name and registration details, No 1 was able to locate information in relation to the transportation of the foundry sand waste. 47Always provided in its Statement of Facts and Contentions a summary of dealings with the EPA in relation to the request for transfer of the EPL, noting that requests for information and provision of documents including an Annual Return were not complied with after No 1 went into liquidation; from that time Mr Matta was a former director of the company. Mr Matta provided a summary of meetings and correspondence (exhibit C, pp 5-11), and exhibited copies of correspondence.

Financial capacity of Always 48Mr John Acheson is Waste Levy Compliance Officer Waste Management Section of the EPA, with responsibility for compliance audits of landfill premises required to pay the waste and environment levy. On 13 April 2012 Mr Acheson was provided with (a) an extract of Financial Statements for Always for the year ended 30 June 2011 including Trading, Profit and Loss Statement and Balance Sheet; (b) extract of Financial Statements for Always for the six months 1 July 2011 to 31 December 2011 including Trading, Profit and Loss Statement and Balance Sheet; and (c) copies of bank statements from July 2010 to February 2012. 49In an affidavit affirmed on 16 April 2012 (exhibit 14) Mr Acheson stated that he had been asked, by reference to that information, to provide an opinion as to the financial capacity of Always to meet its obligations under an EPL. Mr Acheson stated that there are a number of irregularities in the documents: the documents in (a) and (b) are unaudited and unsigned by any responsible party and were incomplete, and contained irregularities such as recording a credit cash balance in Always' bank account as a liability; the financial statements in (a) were missing comparative data for the previous year to 30 June 2010; an entry for "Labour Hire" was absent in (b) whereas in (a) that significant expenditure item was in excess of $1.1 million. Mr Acheson noted that there was a significant change in the make-up of Always' capital account between 30 June and 31 December 2011 for which there was no explanation, being a reduction in owners capital from $3,280,858 to $2,115,098. It appeared that Always had made large loans to related entities, however in the absence of explanatory notes or any other information Mr Acheson was unable to determine the conditions of those loans or how readily recoverable they would be. In relation to the bank statements in (c) Mr Acheson noted that more than $100,000 in cashflows moved through the account each month; cash surpluses were kept to a minimum and there appeared to be frequent movement of funds between the company account and associated partes, eg Mr Matta and No 1; and there were a large number of transactions made in round figures. 50Mr Acheson concluded that in his opinion the financial documents indicated that Always was trading profitably and was in a reasonable financial position: the Trading, Profit and Loss Statements showed a net profit before tax of $321,234 for the year to 30 June 2011 and $1,367,804 for the six months to 31 December 2011; the Balance Sheets indicated reasonable liquidity with current assets exceeding current liabilities by more than $1 million in the year to 30 June 2011 and half year to December 2011; and the Owners Equity (Capital) exceeded total liabilities by a ratio of more than 2:1. Mr Acheson stated that he was unable to form a firm opinion as to the financial capacity of Always due to the completeness of the financial documents and the irregularities. Mr Acheson detailed the additional information he would require to establish a firm opinion in relation to the financial capacity of Always to meet its obligations under an EPL. 51Mr Acheson participated in a conference with Mr Angelo Russo, a qualified accountant and auditor, and Mr Russo and Mr Acheson provided a joint report (exhibit 15). Mr Russo provided a new signed set of financial statements dated 31 March 2012. Having reviewed those financial statements Mr Acheson was satisfied that they are complete and correct and provide an accurate summary of the company's financial position as at 31 March 2012, and he noted that those statements were signed by the company director as well as by Mr Russo. The new statements included for the six months to December 2011 "Subcontractors" to the value of $774,936, and corrected the change in Owners Capital. 52In relation to the loans made to related entities, Mr Russo stated that he had made inquiries regarding the current assets including the loans made by Always as to whether they are realisable. With the exception of a loan to No 1 for $812,546 he was of the opinion that the balance of current assets totalling $4,352,602 are realisable. The Administrator of No 1 is unable to advise the amount that Always would be able to recover from the loan to No 1. All the loans made by Always (with the exception of employee credit card loans) are to related entities and the Matta Family Trust, and Mr Russo was not aware of any written documentation regarding the loan repayment arrangements. Mr Acheson accepted Mr Russo's opinion that the loans made by Always with the exception of the loan to No 1 are realisable. Mr Acheson was satisfied with Mr Russo's statement that if No 1 is not wound up by 30 June 2012 he would make a provision for bad and doubtful debts for this loan in the financial statements. 53Mr Russo stated that his firm was engaged by Always in December 2011 and did not hold previous financial information, and could not supply comparative data; Mr Acheson was satisfied that the new financial statements provided a reasonable indication of the company's financial position and he no longer required the historic statements. Mr Russo stated that none of the company's assets are subject to a fixed or floating charge; the company currently has signed contracts to the value of $6.1 million which are realisable over the next six months, and he is aware that the company is currently negotiating contracts to the value of $7.0 million. 54Based on the financial statements dated 31 March 2012 and the discussions held, Mr Acheson and Mr Russo were of the opinion that Always has the financial capacity to meet its obligations under the proposed EPL.

Respondent's submissions 55The EPA accepts that the financial capacity of Always as a fit and proper person had been resolved, and the issue is the conditions on which the transfer of the EPL should take place. The EPA submits that this raises three issues: what conditions are necessary to bring the site into compliance with the Project Approval and the existing EPL; what is necessary to prevent any worsening of the current breaches of the Project Approval and to minimise the risk of any future breaches; and whether Always can comply with its proposal to simultaneously reduce waste while coming into compliance with the Project Approval and EPL. 56The EPA submits that this decision must be made in light of the following factors: (a) the objectives of the environmental and planning framework set out in the EPA Act and the POEO Act; (b) that the EPL is a privilege held by a person, as opposed to a development consent that applies in respect of property; (c) the director of Always has a very poor compliance history at the site as a director of No 1 and as a director of Always, having regard to the current state of the site, the breaches of the Project Approval and EPL, the multiple breaches of the POEO Act and the failure to comply with the Clean Up Notices issued by the EPA; (d) the director of Always has shown limited understanding of the requirements of the Project Approval and the EPL including in respect of managing stormwater runoff; (e) allowing Always to accept waste before substantially complying with the conditions of the Project Approval and EPL would give little incentive to comply given that the majority of revenue arises from the receipt of waste; (f) the risk to be borne by the community as against Always whose director was responsible for the company that created the risk; and (g) the particulars of the relevant conditions sought to be imposed in light of information provided by Always. 57The EPA submits that its proposed Conditions of Transfer strike a reasonable balance between the interests of the company and the community; they allow the processing of waste but not its receipt until appropriate controls have been installed and stockpiles have been reduced to manageable levels; and they create a situation where the onus and incentive is with Always to bring the site into compliance, whereas the conditions proposed by Always especially in relation to the site layout and WMP put the onus on the Court and the EPA to enforce compliance.

Applicant's submissions 58Always submits that limited weight should be given to the past history of management of the site by No 1 including the Penalty Notices and Clean Up Notices, which were issued a long time ago. The issuing of penalty notices indicates, in accordance with the EPA's Prosecution Guidelines, that the breaches were regarded as being minor. 59Always accepts that the appropriate stockpile height is 3m, and relies on the WRP to bring the stockpiles into compliance. The evidence of Mr Schlick that it is possible to reduce the height of the stockpiles while accepting waste should be preferred to that of Mr Beaman because of his practical knowledge of the site constraints. Always accepts that elements of the SMP remain to be implemented, however the site has been in limbo for a year or more, with no EPL or guarantee that Always would get one, which explains why no effort has been made to achieve compliance. 60Always accepts that the asbestos stockpiles must be removed, and maintains that a 30 day time frame is acceptable given the dormant nature of the site. Always relies on the evidence of Mr Schlick that these stockpiles can be removed without interfering with the general operation of the site including receiving waste. Always submits that a volumetric limit for the stockpiles is not necessary: given the revised site plan with setbacks that should ensure better management of the height and perimeter of the stockpiles. 61Always submits that a financial assurance of $200,000, being $100,000 provided by No 1 which is held by the EPA and $100,000 provided by Always, is sufficient.

Consideration 62At the conclusion of the evidence the parties were in agreement that it was appropriate for the EPL to be transferred to Always, subject to conditions. The central dispute as to the conditions that should be imposed relates to whether Always should be permitted to receive waste while it reduces the stockpiles to the agreed height of 3m and removes the asbestos stockpiles; whether there should be a condition limiting the stockpiles to a specified volume; and the amount of the financial assurance required. 63Chapter 3 of the POEO Act contains the provisions for EPLs, including in s55 the power to transfer an EPL. As noted above, Part 3.5 contains particular conditions that can be attached to a licence, and s 63 provides that nothing in Part 3.5 prevents other conditions being attached to a licence. 64In Botany Bay City Council v Saab Corporation Pty Ltd [2011] NSWCA 308 the Court of Appeal reaffirmed that the scope and purpose of the statutory power being exercised is central to consideration of the limits on the power to impose conditions. The statutory power to impose conditions on transfer of a EPL is framed by reference to the considerations in s 45, which specifies the matters to be taken into account in exercising functions under Part 3, and more generally, by the objects of the Act which are set out in s3, and which relevantly include: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, ... (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, ... (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, 65As is the case for the issue of an EPL under s53, the transfer of an EPL relates to a specified person. While the EPL must specify the premises to which it applies (s56 POEO Act), an EPL is different to a development consent under the EPA Act which operates in rem, and in relation to which Preston CJ observed in Jonah Pty Ltd v Pittwater Council (2006) 144 LGERA 408 at [35] that in considering whether to grant or modify a development consent, it is irrelevant to enquire as to who is the current owner/operator, or who might be the future owner/operator, or whether the present owner/operator has in the past acted or used the land unlawfully, or whether the future owner/operator is likely in the future to act or carry out any approved use unlawfully. 66Given the nature of an EPL, and the legislative framework which governs the granting and transfer of an EPL, in my view the identity, and where relevant past conduct, of a proposed holder of an EPL are relevant factors in considering whether an EPL should be transferred, and the conditions which should be imposed on such a transfer. The focus of the evidence, and the parties' submissions, in these proceedings has been on the matters specified in s 45(c), (d), (f) and (f1) of the POEO Act. Aspects of the consideration of whether the person to whom the licence is to be transferred is a fit and proper person under s 83 in relation to a proposed transferee that is a body corporate include whether a director of that body corporate is or has been the director of another body corporate that has contravened any of the environment protection legislation or other relevant legislation (s 83(2)(b)(ii)), the record of compliance with environment protection legislation of any director (s 83(2)(d)), whether the management of activities or works will be in the hands of a technically competent person (s 83(2)(e)); and more generally, whether the person has demonstrated the financial capacity to comply with obligations under the proposed licence (s 83(2)(m)). 67While it is correct, as Always submits, that s 225 of the POEO Act provides that payment of a penalty imposed in a penalty notice is not to be regarded as an admission of liability, the evidence of the issuing of Penalty Notices, Clean Up Notices and Official Cautions to No 1 while Mr Matta was its sole director and while it was in control of operations at the site, goes to management of the site and the extent of compliance in the past, and is relevant, together with other evidence including that provided by Mr Matta, in assessing the prospects of future compliance. 68Based on the evidence of Mr Robert Hogan, Manager Waste Operations of the EPA (exhibit 11), the surveys in evidence, and the evidence on the view, I am satisfied that the operation of the site has not been consistent with the General Arrangement Plan approved as part of the SMP: internal access roads and external circulation roads are not clearly defined; waste has been placed across areas marked as being internal access roads; and the walls to contain areas of waste have not been erected as shown on the General Arrangement Plan. The provisions of the SMP have not been complied with, in particular the drive over mounds and proposed pollution control works have not been installed. I accept the evidence of Mr Hogan and Mr Beaman that there is no dirty area kept separate from upstream and clean areas by bunds and roll over mounds; there are no separate and defined areas for the receipt, storage and processing of waste; and the barriers around the areas are not appropriately designed for stormwater management. I accept the evidence of Mr Hogan that in the absence of the components of the SMP there is the potential for stormwater with high suspended solids and gross pollutants to enter the stormwater system. 69Based on the survey evidence, the volume of material and the area and height of the stockpiles of material has increased over time between September 2009 to September 2011. There is an inconsistency between the maximum height specified in the Project Approval for "unprocessed or baled materials" of 3m, and the heights specified in condition L5.2.1 of the EPL, which permit higher stockpiles on specified parts of the site. It is not apparent from the evidence before me how the EPA came to issue an EPL inconsistent with the Project Approval. Regardless of the reasons for that inconsistency, Mr Schlick and Mr Hogan agreed that based on the surveys, as at 6 September 2011 the EPL heights were exceeded in five locations, by 2 m to 8 m; as at 23 February 2012 the EPL heights were exceeded in four locations, by 1 m to 5 m (exhibit 13). 70Mr Matta's evidence was that he intends to comply with the environment protection obligations imposed by the legislation and by the EPL if transferred, and that he is confident that Always can bring the site into compliance including removing the asbestos stockpiles and completing the requirements for stormwater management. There are a number of reasons why I do not share Mr Matta's confidence, based on the present state of the site and the past operation of the site under Mr Matta's control: (a) The stockpiles exceed the height permitted under the Project Approval, and under the EPL. The evidence of Mr Alex Bourne, Regional Operations Officer - Waste Operations Section (exhibit 5), which was not disputed, was that the height of the stockpiles and the absence of height markers was brought to the attention of Mr Matta as early as April 2010. The surveys of 1 May 2011, 6 September 2011, 23 February 2012 establish that instead of taking action to reduce the stockpiles, they have increased, and now exceed the permitted height to a significant extent. While I accept that No 1 went into liquidation in January 2011, it was not in dispute that Always, and Mr Matta as its sole director, has continued operation of the site since then. Mr Schlick's evidence was that there has been some reduction in the stockpiles since the survey of 23 February 2012; however it was agreed that the stockpiles are still in excess of the permitted height. While I accept that Mr Schlick manages the day to day operations of the site, his evidence that it is Mr Matta who makes the decisions about the stockpile heights was not disputed. (b) The presence of asbestos in two of the stockpiles has been an issue since May 2010 when the first of the Clean Up Notices was issued by the EPA. The asbestos has not been removed, despite Mr Matta's oral evidence that the removal of the asbestos is not a difficult operation. (c) The present site layout is not consistent with the approved General Arrangement Plan, and the SMP has not been implemented. Mr Matta's evidence was that the dirty runoff is being contained due to use of hay bales. I accept the evidence of Mr Beaman that hay bales are a temporary solution, and not a permanent measure. Mr Schlick accepted in oral evidence that the SMP has not been implemented and the dirty areas are not in a self contained catchment separate from clean areas, and accepted that there has been no formal assessment of the effectiveness of the hay bales and shipping containers in containing dirty water runoff. Mr Matta's evidence that the approved stormwater management plan has been installed with the exception of the wheelwash and pollution control facility was contradicted by the evidence of Mr Schlick. Based on this evidence, I agree with the EPA that dirty stormwater is both a real risk and an actual problem on the site. 71I agree with the EPA that the site is currently an environmental risk, principally in relation to water pollution from stormwater runoff, and that the presence of asbestos is also a serious environmental risk and human safety concern. I share the EPA's concerns as to Mr Matta's approach to compliance while the site was operated by No 1, in particular his reliance on extended correspondence with the EPA to support his position that the clean up notices had been complied with, while the stockpiles the subject of those notices remain. 72The failure to install infrastructure required by the Project Approval, which was substantially unexplained, and failure to manage the site in accordance with the requirements of the Project Approval and the EPL, together with Mr Matta's evidence that it is the receipt of waste, rather than the recycling of it, that is financially lucrative, when considered in the context of the objects of the POEO Act, in particular s 3(d), support a degree of caution in considering the conditions that should be imposed if the EPL is transferred. Condition L3.1 73The EPA proposes condition L3.1 in the following form: The licensee must not cause, permit or allow any waste to be received at the premises until it has complied with the requirements of conditions U1 to U7. 74Conditions U1 to U7 require installation of a dust suppression device in the form of a wheel wash or cattle grid (U1.1); installation of permanent stockpile markers around the perimeter of the waste stockpile areas not more than 20m apart (U2.1, U2.2); reduction of all stockpiles within 90 days to no more than 3m (U3.1), and to a total volume of waste of 27,272 cubic metres (U3.2); removal of all asbestos contaminated waste from two identified stockpiles within 30 days (U4.1); provide a sampling regime to determine the waste classification of stockpiled material in the north east stockpile, report, and remove any waste other than the types of waste authorised to be on site (U5); install a stormwater management system consistent with the key components of the 2009 SMP within 90 days (U6); and install concrete jersey barriers at least 1m high to physically separate roadways and storage areas (U7). 75Always proposes condition L3.1 in the following form: The licensee must cause and permit the premises to be operated in accordance with the licensee's Waste Reduction Plan. The Plan sets out the manner in which the holder proposes to carry out waste reduction and removal. 76Always proposes amendment to condition U3 to remove the limitation on total volume of waste, deletion of condition U5, and amendment of condition U6 to require installation within 90 days of a stormwater management system consistent with "any Stormwater Management Plan that is approved by the NSW Department of Planning for the premises." The proposed amendments to these conditions are considered below. 77I am satisfied, based on the evidence before me, that compliance with conditions U1 to U7 as proposed by the EPA would bring the site into compliance with the requirements of the Project Approval and the EPL within 90 days of the date of transfer of the EPL, including removal of the asbestos contaminated waste within 30 days. The issue is whether Always should be permitted to receive waste before that occurs. 78Mr Matta and Mr Schlick were confident that Always could comply with the reduction targets identified in the WRP while being permitted to receive waste. I prefer the evidence of Mr Hogan and Mr Beaman that there is doubt as to whether that is possible. Based on the evidence of Mr Hogan and Mr Beaman (exhibits 9, 11), which was confirmed on the view, I am satisfied that the current state of the site is such that it is not physically possible to receive waste until a large amount of waste from the existing stockpiles is either removed or significantly reduced in size; that it would be extremely difficult to properly install the stormwater management system consistent with the SMP until a large majority of the existing stockpiles are either removed or reduced in size; and that compliance with the requirement to demarcate stockpile cell areas requires the removal of a large amount of waste material. I accept Mr Beaman's evidence that the asbestos stockpiles need to be removed before the areas where that material is currently stockpiled can be used for normal processing activities. 79The condition as proposed by the EPA would permit waste processing to occur, and on the evidence of Mr Matta, Always could generate some income from the sale of processed waste. While I accept that that income would be significantly less than Always could expect if permitted to receive waste, the evidence of Mr Acheson and Mr Russo establishes that Always has funds available to it, having made a net profit before tax of $1,367,804 in the six months to 31 December 2011, and having current assets exceeding current liabilities by more than $1 million in the year to 30 June 2011 and the half year to 31 December 2011. 80I am satisfied that the physical condition of the site, including the delay in implementing the required stormwater management systems, in the context where there would be a financial incentive to continue to receive waste in excess of permitted limits, means that it is not appropriate to permit Always to accept waste until compliance with the conditions of the Project Approval and the EPL is demonstrated. Condition L3.1 should be in the form proposed by the EPA. Conditions U1 to U7 81Conditions U1, U2, U3.1 and U7 are agreed. Condition U3.2 refers to the volumetric limit established in condition L2, and is considered separately below. 82Condition U4 relates to removal of the asbestos stockpiles, and is agreed with the exception of U4.1(d). Condition U4.1(b) requires notification at least 7 days before commencement of removal of the name and contact details of the landfill where the asbestos waste is to be lawfully disposed of. Condition U4.1(c) requires notification at least 48 hours before removal of the date and time that removal will commence. Condition U4.1(e) requires that Always provide copies of all receipts, dockets and invoices for the removal, transport and disposal of each load of asbestos waste within 40 days from the date of transfer of the licence. 83Condition U4.1(d) as proposed by the EPA requires that removal of the waste not commence until the EPA has confirmed receipt of the notifications required in U4.1(b) and (c), in writing; Always seeks the deletion of this requirement. I accept the evidence of Mr Beaman that it is critical that this waste be removed, and that it be disposed of properly in accordance with the requirements of the Waste Regulation. In the context where it is agreed that the asbestos stockpiles must be removed, and can be removed within 30 days of the transfer of the licence, and where the EPA is to be notified in advance of the place and timing of intended disposaI, I am not persuaded that the addition of a requirement that has the potential to delay compliance is appropriate. Condition U4.1(d) should be deleted. 84Condition U5 provides for classification and removal of the north east stockpile, including provision of a sampling regime to determine the waste classification of this stockpile. Always opposes this condition. Based on the surveys, this stockpile is significantly larger than the other stockpiles in both area and height, and as at 23 February 2012 exceeded the height limit permitted under the Project Approval by 5m. I agree with the EPA that it is important not to defer removal of this stockpile, and that a process of sampling and classification of the waste contained in it will provide clarity and assist in ensuring compliance. Condition U5 should be as proposed by the EPA. 85Condition U6 specifies details of the key elements of the SMP that must be implemented, and provides certainty, rather than leaving open the possibility of further delay if approval of an alternative plan is sought, and the condition should be in the form proposed by the EPA. 86Condition U7.1 requires Always within 90 days from the date of transfer to install concrete jersey barriers at least 1m high to separate roadways and storage areas, "as set out on the [approved Plan of Site Operations - the Applicant has supplied a Plan of Site Operations prepared by Matthew Freeburn, registered surveyors, dated 12 March 2012 and amended 14 March 2012, "Ref: 31936-YARD LAYOUT -12.3.12"]". As noted in submissions by the EPA, this plan (exhibit 12, tab 52) is inconsistent with the General Arrangement Plan, and has not been approved by the Department of Infrastructure and Planning. Condition U7.1 needs to be clarified to identify the site plan to which it refers, and to address any requirement for obtaining the approval of the Department of Infrastructure and Planning. Condition L2 87Condition L2 as proposed by the EPA provides: The volume of waste at the premises, including any processed materials, must not exceed 27,242 cubic metres. 88Always opposes this condition, submitting that the amount of waste on the site can be controlled by reference to the height limits of stockpiles and the setbacks, and this is provided in the revised site layout plan. 89The EPA submits that imposing a volumetric limit condition sets a clear limit on the amount of waste on the site minimising the risk of waste being stockpiled in the manner that occurred by No 1. Always has proposed removal of waste by reference to volume in its WRP. 90The calculation of the volumetric limit at 27,242 cubic metres was provided by Mr Hogan (exhibit 10 paragraphs [16]-[23]), which he explained was calculated by taking the total stockpile area of the premises and allowing the stockpiles to be the height limit of 3 m. In oral evidence Mr Matta agreed that Mr Hogan had calculated the volumes in accordance with the steps outlined in his affidavit, and that the quantity was not much in dispute between them. Mr Matta stated that the calculations shown on exhibit 16 which shows the revised site plan are those made by Mr Hogan, together with his calculations in handwriting: he has totalled the volume to be 37,000 cubic metres. 91Mr Beaman's evidence (exhibit 9) was that the EPA commonly conducts surveys of licensed waste facilities to determine the size and volume of unprocessed and processed waste stockpiles; imposing a volumetric limit ensures that compliance can easily be checked by regular six monthly surveys; this method been adopted for another waste processing facility in Sydney; and this is the method required for every scheduled landfill site required to pay the waste levy, pursuant to cl 14 of the Waste Regulation. In oral evidence Mr Beaman stated that he did not think that it would be sufficient to regulate the amount of waste on the site by reference to height limits and the site layout: given the history and ongoing management of the site, and the flexibility of the boundary roads, waste could be moved readily and there is nothing to fix the setbacks. 92I accept the evidence of Mr Hogan (exhibit 11) that large volumes of waste on a site can lead to problems including difficulty in managing stormwater, dust and noise; visual impacts for neighbours; difficulty in keeping processed and unprocessed stockpiles separate; and difficulty for the EPA in fulfilling its regulatory functions. I agree with Mr Beaman that the flexibility of the boundary roads, with the concrete jersey barriers, leaves open the possibility that setbacks may not be maintained. I accept that even if the height limit is complied with, there is a possibility that the volume of waste on the site may increase to the point where the management problems identified by Mr Hogan arise. On the evidence before me the main priority is to bring the site into compliance, and there will be an incentive for Always to achieve that with the imposition of condition L3.1. I am not persuaded that at this stage imposing a volumetric limit calculated on a plan yet to be implemented will assist in ensuring compliance, beyond the specification in condition L6 of height limits and setbacks to be achieved. It may be that once the site layout plan and SMP are implemented and the stockpiles reduced, a volumetric limit would assist in minimising the risk of increasing volumes of waste being stockpiled on the site as was the case with No 1. The EPA has the power under s 58 of the POEO Act to vary a licence, including the conditions. 93The deletion of condition L2 requires the amendment of condition U3.2 to require reduction of the total volume of waste on the site by reference to height limits and setbacks. The redrafting of the conditions should address the relationship between condition U3.2 and condition U7.1. Condition L6 94The EPA proposes condition L6 in the following form: L6.1 The height of the stockpile of any waste, including any processed materials (whether of waste or any other materials) on the premises, must not exceed: (a) 22.24metres AHD for any stockpile that is located within eight metres of the southern boundary; or (b) 24.21 metres AHD for any stockpile that is located within eight (8) metres of the north east boundary; or (c) 24.00 AHD for any other stockpile on the Premises. Note: the height limit for all stockpiles is based on a 3 metre height limit from the natural ground level of the Premises. L6.2 Any stockpile of waste, including any processed materials, along the southern boundary must be kept five (5) metres away from the fence line at all times. 95Always proposes condition L6 in the following form: L6.1 The height of the stockpile of any waste, including any processed materials, is required to be consistent with the existing Consent for the premises at all times. Note: the height limit for all stockpiles in the Consent is based on a 3 metre height limit from the natural ground level of the Premises. L6.2 Any stockpile of waste, including any processed materials, along the southern boundary must be kept one (1) metre away from the fence line at all times. 96I accept the EPA's submission that because the natural ground level varies across the site, it is preferable to specify measurements that provide accuracy in determining the height of the stockpiles, and which can be readily verified by survey. Condition U2 requires installation of permanent height markers around the perimeter of the site that will assist staff and management in ensuring compliance on a day to day basis with the height limit specified in the Project Approval and the EPL. Condition L6 should be in the form proposed by the EPA. Condition E2 97Condition E2.1 requires provision of a financial assurance on the form of an unconditional and irrevocable guarantee from an Australian bank, building society or credit union in favour of the EPA, prior to transfer of the licence. The EPA proposes the amount of $315,000; Always agrees to provide a financial assurance, but in the amount of $100,000 in addition to the $100,000 presently held by the EPA. 98The EPA originally proposed the amount of $200,000, however Mr Beaman's evidence (exhibit 9, paragraph [66]) was that this would need to be increased if waste is to be stored in the shipping containers which are being used on the site as noise barriers. 99Always submits that $200,000 is appropriate, and refers to Mr Beaman's evidence (exhibit 9 paragraph [92]) that given the value of operating an approved and licensed waste storage and processing facility, other parties who do not have a poor history of compliance and sufficient financial capacity to address the existing issues at the site would be very likely to come forward to apply for a licence. Always relies on a letter dated 1 December 2011 from Mr Michael Hird of BDO, liquidator of No 1, that the liquidator is prepared to assign the EPL and associated bank guarantee in the amount of $100,000 to Always. 100The EPA submits that the financial assurance is particularly important as Always leases and does not own the site; that s 298(1) of the POEO Act requires that a financial assurance be provided by the licensee, which provides an incentive to ensure that licence obligations are met; that once the licence is transferred No 1 is no longer subject to any licence obligations and so the EPA could not make any claim against the financial assurance provided by it; that Always has previously provided a bank guarantee during earlier negotiations regarding the proposed transfer for an amount of $200,000; and that the financial assurance needs to be provided before the transfer as that is when there is the greatest risk of non compliance. 101Section 298(1) of the POEO provides that the conditions of an EPL can require the holder or former holder of a licence to provide a financial assurance. Section 299 provides that a condition requiring a financial assurance cannot be imposed unless the appropriate regulatory authority is satisfied that the condition is justified having regard to: (a) the degree of risk of environmental harm associated with the activities under the licence, or (b) the remediation work that may be required because of activities under the licence, or (c) the environmental record of the holder or former holder of the licence or proposed holder of the licence, or (d) any other matters prescribed by the regulations. 102The amount cannot exceed the total cost of carrying out the relevant work or program, which is the amount that, in the authority's opinion, represents a reasonable estimate of the total likely costs and expenses that may be incurred in carrying out the work or program required by or under the POEO Act for which the financial assurance is required: s300 POEO Act. 103Mr Beaman's evidence (exhibit 9) that the EPA requires licensed waste facility operators to lodge bank guarantees to cover the majority of the costs to remediate or clean up abandoned sites; that the cost of remediation of the site by removal of the contaminated waste presently on the site would be in the order of $16,200,000; and that the financial assurance would only provide the EPA with funds to implement site controls to temporarily stabilise any environmental impacts if the site was abandoned, was not disputed. Having regard to the matters specified in s299, I accept that it is appropriate to require a financial assurance. However I am not persuaded that the evidence before me establishes a basis for requiring the amount of $315,000. Mr Beaman's calculations were based on the capacity of the shipping containers being approximately 462 cubic metres, and the total cost of disposing of waste in the containers at $115,500 was based on the assumption that each container is filled, and the evidence did not address the actual amounts stored in the shipping containers. I consider that a financial assurance of $200,000 as initially proposed is appropriate. In considering whether that amount should be provided by Always, I note that while s298 refers to a financial assurance being provided by "a former holder of a licence", the basis on which the EPA would be able to rely on the financial assurance provided by No 1, if assigned by the liquidators of that company, was not established by Always. I agree with the EPA that provision of a financial assurance directly by a licensee provides an additional incentive for compliance. Condition E2.1 should be imposed to require Always to provide a financial assurance for the amount of $200,000. Other conditions 104The parties agreed that condition A3.1 should be deleted and that condition L3.3 should be amended so that the list of types of waste that can be received at the site once condition L3.1 has been complied with corresponds with the waste permitted under the conditions of the Project Approval.

Conclusion 105I am satisfied that the transfer of EPL No 13198 from Number 1 Excavation and Demolition (NSW) Pty Ltd to Always Recycling Pty Ltd can be approved, subject to conditions in the form agreed between the parties, as amended in accordance with the above reasons. 106I will make directions in consultation with the parties for the provision of amended conditions, following which orders will be made in chambers. Linda Pearson Commissioner of the Court DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 June 2012

(2006) 144 LGERA 408

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Judgment (13 paragraphs)

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