Jeffman Pty Limited v Environment Protection Authority

Judgment on notice of motion 1Sydney Water Corporation applies, by notice of motion filed on 16 May 2014, to be released from an undertaking it gave to the Court at the hearing of these proceedings on 7 December 2010. The other parties to the proceedings neither consent nor oppose Sydney Water's application. 2The proceedings were an appeal by Jeffman Pty Ltd and Lawrence Dry Cleaners Pty Ltd (collectively referred to as 'Jeffman') under s 61 of the Contaminated Land Management Act 1997 against a management order issued by the Environment Protection Authority to take specified action to remediate industrial land owned and occupied by Jeffman for contamination of the soil and groundwater by chlorinated hydrocarbons. Sydney Water was joined as a party to the appeal as the contamination was migrating from the Jeffman source site to adjoining land, including Sydney Water's land. 3At the hearing, the parties disagreed as to the technologies that should be employed to remediate the site. Jeffman and the EPA proposed that the technique of Enhanced In Situ Bioremediation ('EISB') should be utilised. Sydney Water, and another adjoining landowner, the Hutchinsons, submitted that EISB should not be used but rather that either thermal treatment or excavation and associated pump and treat technology should be used. In relation to excavation, Sydney Water submitted that it would be quicker and more efficacious than EISB. Jeffman opposed excavation, primarily on the ground of cost, but also because Sydney Water's land was contaminated by pre-existing contaminants unrelated to contamination by chlorinated hydrocarbons emanating from the Jeffman source site. Jeffman submitted that the cost of excavation and treatment would be increased by the presence of the pre-existing contaminants and Jeffman ought not to have to pay that additional cost. 4Sydney Water sought to meet this argument by undertaking to remediate the pre-existing contamination on the Sydney Water land to meet a mixed use - residential standard. Sydney Water anticipated at that time that this would be a "small job" and might well be done before the Court gave judgment in the proceedings. By undertaking to remediate the pre-existing contamination on the Sydney Water land, Sydney Water sought to meet Jeffman's argument that it should not have to pay the additional cost of remediating the pre-existing contamination of Sydney Water's land. Sydney Water's undertaking was of no relevance to the other remediation technology it urged of thermal treatment or to the remediation technology it opposed of EISB. 5Accordingly, Sydney Water, by its senior counsel, gave to the Court, and the Court noted, an undertaking in terms of a document handed to the Court on 7 December 2010 headed "Commitment to remediate minor contamination". That document defined the pre-existing contamination of the Sydney Water land and stated: Sydney Water will remediate the Pre-existing Contamination to meet a mixed use residential standard consistent with the current zoning as prescribed in the NSW Department of Environment and Climate Change Contaminated Sites - Guidelines for the NSW Site Auditor Scheme (2nd edition) dated April 2006. 6Subsequently, I gave judgment in the proceedings upholding the appeal, revoking the EPA's management order, and making a replacement management order permitting remediation by EISB, on strict conditions, rather than excavation or thermal treatment as had been urged by Sydney Water: Jeffman Pty Ltd and Lawrence Dry Cleaners Pty Ltd v Environment Protection Authority of NSW, Sydney Water Corporation and Douglas and Hilary Hutchinson [2011] NSWLEC 89. 7Jeffman is currently undertaking remediation of the Jeffman source site as required by the Court's management order. 8Sydney Water has undertaken some remediation of its land, but has not achieved the total remediation to the standard that it undertook in its "Commitment to remediate minor contamination" document. Sydney Water now seeks to be released from its undertaking to the Court. 9Sydney Water submits that the Court has power to release it from its undertaking to the Court where there is established such a change of circumstances that it is just and proper that the further continuance of the undertaking should be discharged: see Hutchinson v Nominal Defendant [1972] 1 NSWLR 443 at 447-448. Sydney Water points to five changes in circumstances. 10First, the management order made by the Court did not require Jeffman to use the remediation technology of excavation that had been urged by Sydney Water, but rather EISB. Accordingly, the justification for Sydney Water giving its undertaking to the Court, namely, to remove an argument of Jeffman opposing excavation, was no longer relevant. Sydney Water's undertaking to remediate the pre-existing contamination on the Sydney Water land was not relevant to Jeffman undertaking EISB to remediate the chlorinated hydrocarbons from the Jeffman source site. 11Secondly, subsequent to giving the undertaking, Sydney Water has undertaken extensive investigation and studies of the nature and extent of, and the means to remediate, the pre-existing contamination of the Sydney Water land. These investigations and studies reveal that remediation will be more difficult, time consuming and costly to achieve than had been thought by Sydney Water at the time when it gave its undertaking to the Court. It was not a "small job" that could be done by the time the Court gave judgment. 12Thirdly, the time period between the Court giving judgment and making the management order and Jeffman establishing the EISB infrastructure to undertake remediation has been extended beyond what had been anticipated at the time of the hearing. Furthermore, Sydney Water now has concerns about the possible effect of it undertaking remediation, particularly excavation, of the pre-existing contamination of the Sydney Water site on the EISB infrastructure. Sydney Water does not wish to undertake remediation on its land that might adversely impact on the operation and effectiveness of the EISB remediation being undertaken by Jeffman. 13Fourthly, subsequent investigations and studies by Sydney Water reveal that it would be more efficient, effective and cheaper, and would have less environmental impacts, if the remaining remediation of the pre-existing contamination of Sydney Water's land were to be carried out as part of any redevelopment of the Sydney Water land, most likely for mixed use -residential development. Contaminated soil would not have to be excavated and removed from the site and replaced by clean fill, only to have the clean fill excavated and removed as part of any redevelopment of the site. Recent studies show that much of the soil on the Sydney Water site could be treated and stored on site as part of any redevelopment. 14Fifthly, Sydney Water submits that at the time it gave its undertaking to the Court, it had thought it might be able to successfully negotiate with Jeffman for Jeffman to purchase the Sydney Water land and to undertake the remediation of both the Jeffman source site and the Sydney Water land. Although Sydney Water and Jeffman negotiated subsequent to the judgment until March 2014, negotiations have broken down and Jeffman does not wish to purchase the Sydney Water land. Sydney Water now wishes to put its land to the market and is optimistic that a purchaser will be prepared to undertake remediation of the site as part of any redevelopment. 15Sydney Water submits that these changes in circumstances since it gave its undertaking to the Court make it just and proper that it be released from its undertaking to the Court. 16I agree. Having regard to the basis of and reasons for my decision to make a management order requiring Jeffman to use EISB technology, rather than excavation, and in the events that have happened since the judgment. I am satisfied that it is just and proper that Sydney Water be released from its undertaking given to the Court at the hearing. 17Accordingly, I make the following orders: (1)release Sydney Water Corporation from the undertaking it gave to the Court on 7 December 2010 in terms of the document headed "Commitment to remediate minor contamination"; and (2)make no order as to the costs of Sydney Water's notice of motion filed on 16 May 2014.