Shannongrove Pty Ltd v Environment Protection Authority

Court of Criminal Appeal (NSW)|2013-05-16|Before: Basten ACJ, Hall J, Barr AJ, Spigelman JJ, Craig J

S M Berveling (Applicant) J L Glissan QC/M T England (Respondent) Solicitors:

AR Walmsley & Co (Applicant) Office of Environment and Heritage (Respondent) File Number(s): CCA 2012/308873 Decision under appeal Jurisdiction: 9106 Citation: Environment Protection Authority v Shannongrove Pty Ltd (No 2) [2012] NSWLEC 202 Date of Decision: 2012-09-05 00:00:00 Before: Craig J File Number(s): LEC 50033; 50034 of 2009

Judgment 1BASTEN ACJ: This case and an accompanying matter, Environment Protection Authority v Terrace Earthmoving Pty Ltd, concern the meaning of "waste" in the Protection of the Environment Operations Act 1997 (NSW). Each defendant was charged with transporting waste to a place that cannot lawfully be used as a waste facility for that waste, contrary to s 143(1) of the Act. Shannongrove Pty Ltd was convicted but Terrace Earthmoving Pty Ltd was acquitted. Shannongrove has appealed pursuant to ss 5AB and 5AA of the Criminal Appeal Act 1912 (NSW). It will be necessary to identify the relevant statutory provisions, the principles of statutory construction and the correct approach to the application of those principles to the Act. With those matters in mind, the legislation can be applied to the facts. Before undertaking that process, however, it is convenient to note briefly the circumstances to which the relevant construction is to be applied.

Factual background 2Shannongrove contracted with the operator of a waste facility at Eastern Creek to take a form of sludge referred to as "liquid by-product" which resulted from the treatment of organic waste. The facility was known as the "Urban Resources Reduction Recovery and Recycling Facility" or, more colloquially, the "UR-3R Facility". Shannongrove collected the liquid by-product from Eastern Creek and transported it to a farm on Northern Road, Bringelly on which the owner ran dairy cattle. The liquid was injected into the soil as a form of fertiliser. However, the farm was not a "waste facility" within the meaning of that term in the Act and was not licensed to receive such waste. The correctness of the conviction therefore depended upon whether liquid by-product or sludge was properly characterised as "waste" for the purposes of s 143(1). Looked at from the perspective of the operator of the UR-3R Facility, it was waste, in the sense that it was an unwanted by-product of the processing undertaken at the facility. Looked at from the perspective of the dairy farmer, it provided a means of improving his pastures. 3The charges related to a course of conduct which was divided into two periods. The period the subject of the first charge ran from "about 28 January 2005" until 28 April 2006; the period the subject of the second charge from "about 1 May 2006" until 5 July 2006. 1 May 2006 was the commencement date of significant changes in the Act. The nature of the changes will be discussed below in considering the separate charges, but they involved, primarily, significant increases in the maximum penalties (in the case of a corporation, increasing from $250,000 to $1 million) and changes in the definition of "waste". 4There was a dispute at trial as to the precise amount of liquid transported and its proper designation. The trial judge accepted that almost 5,000 tonnes of liquid transported over the two periods constituted "excess process water", some 540 tonnes was "digester liquid" and the small remainder other forms of waste water, amounting in total to approximately 5,660 tonnes: Environment Protection Authority v Shannongrove Pty Ltd [2010] NSWLEC 162; 176 LGERA 31 at [111]. As a tanker load constituted between 25 and 28 tonnes of liquid, or approximately 25,000-28,000 litres, about 200 loads were transported during the relevant periods: at [43]. Nothing turns on the nature of the loads for present purposes.

The statutory scheme 5Prior to 1 May 2006, s 143(1) of the Act read as follows: 143 Unlawful transporting of waste (1) Offence If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste: (a) the person, and (b) if the person is not the owner of the waste, the owner, are each guilty of an offence. ... (3C) Defence-waste not deposited It is a defence in any proceedings for an offence under this section if the defendant establishes that the waste transported by the defendant was not deposited by the defendant or any other person at the place to which it was transported. (4) Definitions In this section: ... owner of waste includes, in relation to waste that has been transported, the person who was the owner of the waste immediately before it was transported. waste includes any unwanted or surplus substance (whether solid, liquid or gaseous). A substance is not precluded from being waste merely because it may be reprocessed, re-used or recycled. 6The Dictionary to the Act, prior to 1 May 2006, also had a definition of waste, which was in the following terms: waste (unless specially defined) includes: (a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or (b) any discarded, rejected, unwanted, surplus or abandoned substance, or (c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, reprocessing, recovery or purification by a separate operation from that which produced the substance, or (d) any substance prescribed by the regulations to be waste for the purposes of this Act. A substance is not precluded from being waste for the purposes of this Act merely because it can be reprocessed, re-used or recycled. 7The trial judge held, for reasons which should be accepted, that the term "waste" was "specially defined" in s 143(4), prior to 1 May 2006 and, accordingly, the definition in the Dictionary did not apply. The relevant definition of "waste" for the purposes of the first charge was that found in s 143(4). 8After 1 May 2006, the operative provision read as follows: 143 Unlawful transporting or depositing of waste (1) Offence If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste, or causes or permits waste to be so transported: (a) the person, and (b) if the person is not the owner of the waste, the owner, are each guilty of an offence. 9The defence in subs (3C) did not change, but the definition of "waste" in sub-s (4) was removed. From 1 May 2006, the relevant definition was that appearing in the Dictionary, which was amended to delete the words "unless specially defined". 10The definition of "waste" in the Dictionary was also amended from 1 May 2006 so that what had been paragraph (d) (referring to substances prescribed by regulations), became paragraph (e) and a new paragraph (d) in the following terms was inserted: (d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations....

Principles of statutory interpretation 11In considering the relevant principles of statutory interpretation, it is convenient to start by noting that both definitions purported to be inclusive rather than exhaustive. That raises a question as to whether the intention is that "waste" has an ordinary meaning, of which the specified characteristics are examples, or to which they are extensions. 12That which is included is "any unwanted or surplus substance". That language invites the questions "unwanted by whom" or "surplus to whose wants or needs"? Is the relevant perspective that of the owner of the substance prior to transportation, the transporter, or the person (if any) with whom the substance is to be deposited? Is the point of reference the same in all cases? If the substance is wanted or needed by any person, is it waste? If not wanted or needed by the owner prior to transport, but wanted or needed by the person to whom it is to be transported, does the substance change its character at some point in time, and if so, when? 13Turning to the second sentence of the definition in s 143(4), there are further elements of uncertainty. Does that sentence refer to the capacity of the substance to be reprocessed, re-used or recycled or to a factual possibility that it will be reprocessed, re-used or recycled? Secondly, if it is either capable or likely to be reprocessed etc, it apparently may not be "waste", but in what circumstances will it yet be waste? Further, should one infer that if the substance is in fact reprocessed, re-used or recycled, it will, at least at that time, cease to be waste? 14In the course of submissions, the Court was invited to look to various materials beyond the terms of s 143 in order to answer these questions, and in particular: (a) other provisions of the Act and especially the objectives identified in s 3; (b) earlier legislation dealing with similar issues; (c) case law; (d) general principles of statutory construction; (e) authorities dealing with a European directive, and (f) definitions from English language dictionaries. However, it was not suggested that the term had any special meaning in trade, industry, commerce or environmental protection. 15There is no doubt that the language of the definitions must be construed coherently with other provisions of the Act and by reference to its objects, in accordance with general principles of statutory construction. This exercise will involve the need to have regard to variations in terminology, both within the Act at a particular time and changes made over time. The development of the current definitions from earlier legislation and the use of English language dictionary definitions are of limited value in this context. Similarly, any case law must be addressed with particular reference to the provision being considered. Further, the European Directive, to which attention was drawn by counsel for the Authority, was one in which "waste" was defined as "any substance or object ... which the holder discards or intends or is required to discard." This definition focused upon the "holder" of the material and the holder's intention and action. The authorities applying that definition reach a conclusion which favours that sought by the Authority in the present case, but by reference to language which does not assist in construing the New South Wales Act. 16The objects of the Act relevantly state: 3 Objects of Act The objects of this Act are as follows: (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: ... (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, ... (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, .... 17These objects operate at a level of generality which no doubt informs the specific regulatory scheme contained in the text of the Act. They are, however, of no significant assistance in resolving the present questions. Rather, it is necessary to focus on the language used in the various provisions, read in their statutory context. 18There are various general law principles of statutory interpretation which have the potential to operate in the present case. These include syntactical presumptions and other grammatical aids, including those set out, for example, in Pearce and Geddes, Statutory Interpretation in Australia, (7th ed, 2011), Ch 4. There are also statutory directions and, in particular, the requirement in s 33 of the Interpretation Act 1987(NSW): 33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act ..., a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act ...) shall be preferred to a construction that would not promote that purpose or object. 19A difficulty with the application of this provision, identified in a number of leading authorities, is that it presumes it is possible to identify "the purpose or object underlying the Act", whereas legislation frequently involves conflicting policies and interests which it seeks to balance, one against the other. To identify, at a high level of generality, an underlying purpose or object is unlikely to assist in the construction of a specific provision or even phrase or, as in the present case, word. Furthermore, some provisions may be specifically directed to limiting the effects or consequences of a broad application of the underlying purpose of the legislation, but it does not follow that they should not be given their full effect, in accordance with the language used by the legislature. 20The Interpretation Act also provides for the use of extrinsic material: 34 Use of extrinsic material in the interpretation of Acts and statutory rules (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable. 21As Spigelman CJ has noted, this empowering provision depends upon a somewhat value-laden condition, namely that the extrinsic material is in fact "capable of assisting in the ascertainment of the meaning of the provision": Harrison v Melhem [2008] NSWCA 67; 72 NSWLR 380 at [12]. That language leaves unresolved the question of the manner in which such assistance is to be derived. The parties did not indicate there was any principle to be gleaned from the earlier legislation or the parliamentary debates, except in relation to the new paragraph (d) in the 2006 legislation. That paragraph expands the concept of waste to substances that have been processed etc, but only where regulations so provide. Paragraph (d) had no operation, in part because the substances were not relevantly processed and also because there were no regulations in force at the times covered by the second charge. 22Beyond those principles, and subject to matters of emphasis and priority, it is clear that "the task of statutory construction must begin with a consideration of the text itself", as noted in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27 at [47]. The passage in the joint reasons in Alcan further stated: "The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy." 23Spigelman CJ, writing extra-judicially, said that that approach is entirely consistent with earlier statements in CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; 187 CLR 384 at 408 and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]: see Spigelman JJ, "The Intolerable Wrestle: Developments in Statutory Interpretation" (2010) 84 ALJ 822 at 828-829; and see Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 87 ALJR 98 at [39]. This approach is also consistent with that adopted by the High Court in Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2012] HCA 36; 246 CLR 379. In considering the meaning of "uneconomical" in the context of legislation which provided for possible access by third parties to infrastructure facilities where it would be "uneconomical for anyone to develop another facility", the High Court gave consideration to a broad range of contextual and extrinsic material: at [94]-[98]. 24Statements of principle applicable to statutory construction can result in an over-sophisticated formulation with reliance on a variety of presumptions, maxims and rules. On the other hand, failure to articulate the approach being undertaken is liable to give rise to inconsistency and a lack of transparency. Although the legislative regime regulating the transport and disposal of waste is complex, it is desirable that, where possible, the language used should be construed in a manner which is reasonably accessible to those whose activities are subject to regulation.

Charge - first period 25Addressing the period covered by the first charge, the definition of "waste" in s 143(4) referred only to "any unwanted or surplus substance". It further noted that a substance "is not precluded from being waste" merely because it "may be" reprocessed, reused or recycled. In adopting that specific definition, the legislature expressly refrained from applying to this offence the general definition found in the Dictionary to the Act. In part, that choice was understandable. Thus, paragraph (a) of the Dictionary definition, referring to discharges, emissions and deposits, is not obviously relevant to an offence which focuses on transportation. No doubt that which is transported may be deposited so as to alter the environment, but depositing is not part of transportation: see further the discussion of the defence in sub-s (3C), at [37] below. 26Within paragraph (b) in the special definition, the legislature chose the words "unwanted" and "surplus", but did not include "discarded", "rejected" and "abandoned". This may have been intended to simplify the definition by avoiding words which would probably not be engaged with respect to an offence of transportation and which did not, in any event, engage any significantly different concepts. Each of the extra words describes a characteristic resulting from an activity of the owner (discarding, rejecting, abandoning) which may demonstrate a state of mind consistent with not needing or wanting the substance. 27What is less clear is why the definition in s 143(4) omitted reference to what was paragraph (c) in the Dictionary definition. That in turn gives rise to a question as to whether paragraph (c), referring to an "otherwise discarded ... substance intended for sale or for recycling ..." was an extension of paragraph (b) or merely a clarification of its intended scope. At least in the present case, there was no evidence that the original owner had any intention of the kind referred to in paragraph (c); nevertheless, the relevance of the paragraph for present purposes is the light it may throw upon the scope of the language used in paragraph (b) and in s 143(4). 28There is a further difference between the language of s 143(4) and the definition in the Dictionary. The final sentence of s 143(4) as to non-preclusion, refers to a substance which "may be" reprocessed, reused or recycled. In the Dictionary definition, the reference is to a substance which "can be" reprocessed etc. The former appears to refer to a possible expectation of a person, the latter to a capacity of the substance. It is, perhaps, unlikely that any variation in meaning was intended, but the variation in language suggests that limited assistance as to the scope of s 143(4) can be obtained by a comparison with the Dictionary definition which was excluded. It is unproductive to seek further guidance from the exclusion of paragraph (c). 29Viewed in isolation, the language of s 143(4) would be understood to refer to substances which were unwanted by their owner, or surplus to the needs of the owner. Whilst they might cease to be waste at some point if reprocessed, reused or recycled, the fact that such a course may be undertaken in the future by another person, would not prevent the substance being waste in the hands of the owner and hence at the point at which transportation commenced. 30Before reaching a final conclusion as to the meaning of the term "waste" in s 143, it is proper to have regard to the full scope of the offence. A further essential element of the offence is that waste is transported "to a place", of a specified character. That requires reference to the definition of a "waste facility" and the limits on the lawful use of places as waste facilities for particular waste. 31Critical to the scheme of the Act is the concept of a "scheduled activity", which means an activity listed in Schedule 1 to the Act: see s 5(1) and Dictionary, scheduled activity. Schedule 1, relevantly for present purposes, identifies in Part 1 activities described as "premises-based". The occupier of premises at which a scheduled activity is carried on must hold a licence with respect to that activity: s 48(2). The trial judge found (a finding not challenged on appeal) that the use of premises for such an activity in circumstances where the owner did not have a licence satisfied the requirement in s 143 that the place could not "lawfully" be used for that activity. 32Throughout the two periods covered by the charges, Schedule 1, Part 1 contained an alphabetical listing of premises-based activities, which included "waste facilities". Those included "land fill or application sites" within the Sydney metropolitan area: item (1)(f). It was common ground that the land where the liquid was deposited was within the Sydney metropolitan area and that the exceptions in paragraph (f) did not apply. (There was an issue as to whether a separate exception applied, which will be addressed below.) Schedule 1 (which was significantly amended in 2008) contained its own interpretive provisions, in Part 3. For the purpose of certain activities relating to waste, including "waste facilities", the term "land fill or application site" was defined as follows: landfill or application site means a waste facility used for the purpose of disposing waste to land, including (but not limited to) disposal by any of the following methods: ... (c) injecting the waste into the land .... 33The trial judge found, largely on the basis of agreed facts, that the Bringelly farmland was used in a manner which rendered it a "landfill or application site" and thus a "waste facility" within the meaning of the Schedule. It was common ground that the owner did not have a relevant licence. 34The applicant's contention, below and in this Court, did not challenge the proposition that the liquids transported were unwanted or surplus in the hands of the UR-3R facility, but rather contended that they were no longer unwanted, nor surplus, once loaded on the appellant's tanker. At that point, their transportation became part of the appellant's business and the deposit of the liquid into the soil at Bringelly was accepted by the owner of the land, who therefore 'wanted' them. Accordingly, the liquids were "wanted" from the moment they were placed in the truck until they were disposed of, with the consequence that they did not constitute "waste" at any point during transportation. This submission must be rejected, because it cannot stand with the statutory scheme. If correct, it would follow that no material, whilst in transit, was waste, so long as it was transported as part of a business and that the intended recipient accepted it willingly. Nor did it assist to characterise the liquid as having a beneficial use when disposed of on the farmland at Bringelly. 35That conclusion may be supported by reference to a further exception to the definition of "waste facility" in Schedule 1 to the Act, relied upon by the appellant as engaged in the present case. Thus, paragraph (3) provided: (3) The following premises are not waste facilities for the purposes of this item: ... (d1) premises (being premises in ... the Sydney metropolitan area) on which any one or more of the following types of organic waste (and no other type of waste) is applied to land for agricultural or environmental rehabilitation purposes: (i) garden waste, (ii) biosolids categorised as Unrestricted Use in accordance with the criteria set out in the Biosolids Guidelines, (iii) biosolids categorised as Restricted Use 1, 2 or 3 in accordance with the criteria set out in the Biosolids Guidelines (but only if they are applied to land in accordance with those Guidelines), (iv) liquid food waste, (v) manure, (vi) treated grease trap waste from the preparation or manufacturing of food, (vii) any mixture of the types of wastes specified in subparagraphs (i)-(vi). 36If the appellant's argument were correct, the careful selection of criteria to be found in this (and other) exceptions, would be futile. Substances applied to land for agricultural purposes would not be waste at all, because, it may be presumed, their application would be wanted by those carrying out the agricultural purposes, as in the present case. The careful delineation of the areas covered and the precise kinds of waste which can be applied would constitute an exercise in futility. A construction of the legislative scheme which had that effect cannot be accepted. 37Further, as the trial judge noted, the argument for the appellant relied in part upon the defence provided by s 143(3C), which was established if "the waste transported by the defendant was not deposited ... at the place to which it was transported". This argument accepted that the relevant wants or needs were those of the owner of the substance, but contended that as depositing was an essential element of the offence, the attitude of the owner of the substance at the point of deposit was relevant to determining whether or not the substance was "waste". 38The fallacy in this submission lies in the proposition that the defence involved negativing an element of the offence. It clearly did not: the elements of the offence were established by transportation of waste to a place having the proscribed characteristic. Nothing in the language of s 143(1) suggests that depositing the waste was an element necessary for completion of the offence: the fact that non-deposit of the waste is a defence to be affirmatively established by the defendant is consistent with that conclusion. Even were that conclusion not correct, the submission should be rejected for the reasons previously given, based on futility. 39For these reasons, which are consistent with those relied upon by the trial judge in respect of the points now raised, the appeal in respect of the first charge must be dismissed.

Application of principles - second period 40The conduct involved in the second period charged was substantially identical to that undertaken in the first period. The differential factor arose from the change in the relevant definition of "waste". Not only was s 143(4) repealed, but the Dictionary definition was amended in two significant respects. First, it was expanded to include "any processed ... substance produced wholly or partly from waste that is applied to land ... but only in the circumstances prescribed by the regulations": new paragraph (d). Because there were no relevant regulations, this provision had no direct application to the facts of the present case. It is not necessary, therefore, to consider whether the substance applied to the land was relevantly "produced ... from waste". Rather, the significance of the new paragraph for present purposes lies in a variation in the language used in the final non-preclusion provision at the end of the definition. In the earlier definition, a substance was not precluded from being waste merely because it "can be" reprocessed etc; the new language operates where the substance "is or may be processed, recycled, re-used or recovered". This expansion is evidently intended to reflect the language of paragraphs (c) and (d). (Paragraph (c) now also refers to "processing", whereas it previously referred to "reprocessing": this change is not presently significant.) 41There is no basis for construing the new definition of "waste" as more restrictive than the earlier definition, or the definition in s 143(4) which applied to the first charge. Indeed, paragraph (c) expressly contemplates that discarded (etc) substances might be intended for sale or recycling (etc) and would yet constitute waste. The effect of that provision will be likely to include material which would not ordinarily be described as waste and will thus constitute an expansion of the ordinary meaning of the term. Because the language of unwanted or surplus substances, which was applied in respect of the first charge, has equal application to the second charge, the same result must follow. It is, accordingly, not necessary to consider whose intention may be covered by the expansive terms of paragraph (c). The appeal in respect of the conviction on the second charge must also be dismissed. 42HALL J: I agree with Basten ACJ. 43BARR AJ: I agree with Basten ACJ.

Amendments 20 March 2014 - Correcting typographical errors in [1]. Adding case citation in [4]. 14 deleting "and" at end. [31] adding "the" before "concept". [32], [33] correcting "landfill". [40] amending quotation marks in penultimate sentence. Amended paragraphs: [1], [4], [14], [31], [32], [33], [40] 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: 20 March 2014

Environment Operations Act 1997(NSW)

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