The Next Generation (NSW) Pty Ltd v State of New South Wales

The Thermal Energy from Waste Regulation

1. The Thermal Energy from Waste Regulation establishes two forms of prohibition: one on the carrying out of specified activity or work (in s 143) and the other on approving an environment protection licence for the specified activity or work (s 145).
2. Section 143(1) and (2) of the Thermal Energy from Waste Regulation specify the activity and the work that are prohibited: 143 Prohibition on energy recovery from thermal treatment of waste (1) A person must not carry out, or cause or allow to be carried out, the thermal treatment of waste if - (a) it involves or results in energy recovery from the waste, and (b) one or more of the activities carried out at the premises are scheduled activities that require a licence. (2) A person must not carry out, or cause or allow to be carried out, work at a premises that purports to enable the activity prohibited by subsection (1) to be carried out at the premises.
3. Subsection (3) makes it an offence to carry out the activity or work prohibited by subsections (1) or (2): (3) An offence under this section is a strict liability offence. Maximum penalty - (a) for a corporation - (i) 400 penalty units, and (ii) for a continuing offence - a further 400 penalty units for each day the offence continues, or (b) for an individual - (i) 200 penalty units, and (ii) for a continuing offence - a further 200 penalty units for each day the offence continues.
4. The maximum penalties for the offence for an individual and for a corporation do not exceed the penalty able to be imposed under s 323(3) of the POEO Act.
5. The prohibition on carrying out the activity or work referred to in s 143(1) or (2) is subject to the exceptions in s 144(1), (3) and (4) of the Thermal Energy from Waste Regulation. Each subsection provides that a person is not guilty of an offence under s 143 in the circumstances specified in the subsection. For subsection (1), the circumstance is the carrying out of the activity or the work in certain precincts or premises. Subsection (1) provides: 144 Exceptions to prohibition on energy recovery from thermal treatment of waste (1) A person is not guilty of an offence under section 143 if the activity or work prohibited by the section is carried out at - (a) the Parkes Activation Precinct, or (b) one of the following nominated precincts, identified on a map published in the Gazette by the EPA - (i) the Richmond Valley Regional Jobs Precinct, (ii) the Southern Goulburn Mulwaree Precinct, (iii) the West Lithgow Precinct, or (c) one of the following nominated precincts or premises, identified on a map or specified in a notice published in the Gazette by the EPA - (i) an Activation Precinct, (ii) a Regional Jobs Precinct, (iii) former mine premises, (iv) former thermal electricity generation premises.
6. The Environment Protection Authority (EPA) has power to vary or revoke a nomination referred to in s 144(1)(b) or (c): s 144(2) of the Thermal Energy from Waste Regulation.
7. For subsection (3), the circumstance is that the activity is an established and operating activity: (3) A person is not guilty of an offence under section 143 if the activity prohibited by the section is - (a) lawfully able to be, and first, carried out before the commencement day, and (b) an established and operating activity at the premises immediately before the commencement day.
8. For subsection (4), the circumstances concern replacing the use of less environmentally sound fuel and generating energy for use in or to power industrial or manufacturing processes at the premises: (4) A person is not guilty of an offence under section 143 if - (a) the activity prohibited by the section is carried out to replace the use of a less environmentally sound fuel, and (b) the fuel was, or was lawfully able to be, thermally treated at the premises immediately before the commencement day, and (c) for fuel thermally treated at the premises in the 12-month period ending immediately before the commencement day - at least 90% of the energy recovered from thermally treating the fuel, including energy generated from the energy, was used in, or to power, industrial or manufacturing processes at the premises during the period, and (d) at least 90% of the energy recovered from thermally treating the waste, including energy generated from the energy, is used in, or to power, industrial or manufacturing processes at the premises in a 12-month period.
9. Section 145 contains the second form of prohibition: 145 Effect of prohibition on environment protection licences The EPA must refuse an application for the issue, transfer or variation of a licence if granting the application would purport to authorise an activity or work prohibited by this Part.

The regulation-making power

1. Section 323 of the POEO Act contains the regulation-making power. So far as is relevant, s 323 provides: 323 Regulations (1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act. (2) In particular, the regulations may make provision for or with respect to the matters set out in Schedule 2. (3) The regulations may create offences punishable by a penalty not exceeding - (a) 200 penalty units in the case of an individual, or (b) 400 penalty units in the case of a corporation.
2. Amongst the matters set out in Schedule 2 to the POEO Act are those in clause 5 concerning waste: 5 Waste (1) The operation of waste facilities, and the treatment, storage, processing, recovery, recycling, re-use or disposal of waste at waste facilities (whether or not they are required to be licensed under this Act). (2) The transportation of waste by persons (whether or not they are required to be licensed under this Act). (3) The collection, storage, creation, handling, processing, recovery, recycling, re-use and disposal of waste. (4) The construction or maintenance of containers, vehicles and vessels used for the transportation of waste. (5) The provision of information relating to the operation of waste facilities or the transportation of waste (whether or not they are required to be licensed under this Act). (6) Prohibiting or regulating the storage, processing, recovery, recycling, re-use or disposal of any waste.

The claimed inconsistencies between the Thermal Energy from Waste Regulation and the POEO Act and EPA Act

1. Next Generation contended that the Thermal Energy from Waste Regulation was inconsistent with the POEO Act and the EPA Act in five respects.
2. First, Next Generation submitted that, at the most basic level, the Thermal Energy from Waste Regulation prohibits what the POEO Act permits. Next Generation contended that the scheme of the POEO Act is for an environment protection licence to authorise the carrying out of scheduled activities at any premises. Section 48 of the POEO Act imposes a requirement for a licence to carry on scheduled activity at premises: 48 Licensing requirement - scheduled activities (premises-based) (1) Application of section This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on . (2) Offence A person who is the occupier of any premises at which any such scheduled activity is carried on is guilty of an offence, unless the person is, at the time that activity is carried on, the holder of a licence that authorises that activity to be carried on at those premises. Maximum penalty - (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
3. A "scheduled activity" is an activity listed in Sch 1 to the POEO Act: see s 5(1) and the Dictionary of the POEO Act. Clause 1(1) of Sch 1 provides: 1 Application of Part (1) For the purposes of section 48, any activity that is declared by this Part to be a scheduled activity is taken to be an activity for which a licence is required for the premises at which it is carried out (the activity is premises-based).
4. One of the activities listed in Sch 1 is cl 18 concerning energy recovery: 18 Energy recovery (1) This clause applies to the following activities - energy recovery from general waste, meaning the receiving from off site of, and the recovery of energy from, any waste (other than hazardous waste, restricted solid waste, liquid waste or special waste). energy recovery from hazardous and other waste, meaning the receiving from on site or off site of, and the recovery of energy from, hazardous waste, restricted solid waste, liquid waste or special waste. (2) However, this clause does not apply to any of the following - (a) the processing of contaminated soil, (b) container reconditioning, (c) the recovery of gases that are dangerous goods of Class 2 within the meaning of the Transport of Dangerous Goods Code. (3) Each activity referred to in Column 1 of the Table to this clause is declared to be a scheduled activity if - (a) it meets the criteria set out in Column 2 of that Table, and (b) in the case of an activity that meets the criteria to be the scheduled activity of waste disposal (thermal treatment) - an exemption granted under Part 9 of the Protection of the Environment Operations (Waste) Regulation 2014 exempts the person carrying out the activity from the requirements of section 48 (2) as they apply to waste disposal (thermal treatment). (4) For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram. Table Column 1 Column 2 Activity Criteria energy recovery from general waste involves processing more than 200 tonnes per year of waste (other than hazardous waste, restricted solid waste, liquid waste or special waste) energy recovery from hazardous and other waste involves having on site at any time more than 200 kilograms of hazardous waste, restricted solid waste, liquid waste or special waste

1. Next Generation's proposed development involves energy recovery from general waste and processing more than 200 tonnes per year of waste. It is, therefore, a scheduled activity.
2. Accordingly, in order to avoid committing an offence against s 48(2) of the POEO Act, Next Generation would need to hold a licence authorising the scheduled activity of energy recovery from general waste to be carried out at the premises.
3. An application for the issue of a licence is made to the EPA under s 53(1) of the POEO Act. The application must be made in or to the effect of the form approved by the EPA or be accompanied by such information as is required by the EPA and be accompanied by the prescribed fee: s 53(2) of the POEO Act.
4. In determining whether to grant or refuse the application for the issue of a licence, the EPA is required to take into consideration such of the matters in s 45 of the POEO Act as are of relevance.
5. The EPA has a discretion under s 55(1)(a) of the POEO Act to grant or refuse an application for the issue of a licence. If the EPA grants the application, the licence may be issued subject to conditions or unconditionally: s 63(1) of the POEO Act. If the EPA intends to refuse the application for the issue of a licence, it must not do so until it complies with the requirements of s 55(2) of the POEO Act: (2) The appropriate regulatory authority must not refuse the application unless before doing so - (a) it has given notice to the applicant that it intends to do so, and (b) it has specified in that notice the reasons for its intention to do so, and (c) it has given the applicant a reasonable opportunity to make submissions in relation to the matter, and (d) it has taken into consideration any such submissions by the applicant.
6. A licence that is issued is required to specify the premises to which it applies, which are to be the whole of the premises at which the activity authorised or controlled by the licence is carried out : s 56(1) of the POEO Act. The licence authorises the activity to be carried out at those specified premises: s 43(b) and s 48(1) of the POEO Act.
7. Next Generation contended that the Thermal Energy from Waste Regulation is inconsistent with this permissive licensing scheme, by prohibiting both the grant of a licence authorising the scheduled activity of thermal treatment of waste to be carried out at premises and the carrying out of that scheduled activity at the premises.
8. As to the first, whilst s 55(1)(a) of the POEO Act affords the EPA a discretion to grant or refuse an application for the issue of a licence, s 145 of the Thermal Energy from Waste Regulation mandates that the EPA refuse an application for the issue of a licence "if granting the licence would purport to authorise an activity or work prohibited by this Part" (being Pt 4 of Ch 9). The reference to "activity or work prohibited by this Part" is a reference to the prohibition in s 143(1) and (2) of the Thermal Energy from Waste Regulation. Section 143(1) prohibits the carrying out of thermal treatment of waste at premises in the circumstances specified in the subsection. Section 143(2) prohibits the carrying out of work at premises that purports to enable the activity prohibited by subsection (1) to be carried out at the premises.
9. Accordingly, Next Generation submitted s 145 of the Thermal Energy from Waste Regulation impermissibly fetters the exercise of the discretion in power in s 55(1)(a) of the POEO Act by mandating that the power be exercised in only one way by refusal of the application for the issue of a licence. That the mandated refusal of an application for the issue of a licence under s 145 of the Thermal Energy from Waste Regulation is inconsistent with the discretion to grant or refuse such an application under s 55(1)(a) of the POEO Act is also shown by the pre-condition to refusal in s 55(2) of the POEO Act. That subsection precludes the EPA from refusing an application for the issue of a licence unless, before doing so, the EPA takes the steps specified in paragraphs (a) - (d) of the subsection, including giving notice to the applicant, specifying in that notice the reasons for its intention to refuse the application, inviting submissions, and considering any submissions made. Next Generation submitted that there would be no point in undertaking these steps if the EPA had no choice but to refuse the application. Section 145 of the Thermal Energy from Waste Regulation frustrates achievement of the purpose of s 55(2) of the POEO Act.
10. Similarly, Next Generation submitted that the mandated refusal of an application for the issue of a licence by s 145 of the Thermal Energy from Waste Regulation renders any appeal to the Court futile. Section 287(1) of the POEO Act entitles a person who makes a licence application and who is aggrieved by any decision of the EPA with respect to the application to appeal to the Court against the decision. On appeal, the Court exercises the function of the EPA under s 55(1)(a) of the POEO Act to determine the application. However, the Court would be bound, just as the EPA was bound, to refuse the application by reason of s 145 of the Thermal Energy from Waste Regulation. The appeal would be pointless as there could only be one outcome, to refuse the application.
11. As to the second, whilst a licence issued under s 55(1) of the POEO Act would authorise the carrying out of the scheduled activity of thermal treatment of waste at the premises specified in the licence, s 143(1) and (2) of the Thermal Energy from Waste Regulation prohibits the carrying out of the activity of thermal treatment of waste at the premises and work that purports to enable that activity to be carried out at the premises. Section 143(1) and (2) therefore prohibit the very activity and work that the licence authorises to be carried out at the premises.
12. Secondly, Next Generation contended that s 145 of the Thermal Energy from Waste Regulation is inconsistent with ss 4.42, 4.50 and 5.24 of the EPA Act. Those provisions of the EPA Act require, in different ways, the licence under the POEO Act to be granted, yet s 145 of the Thermal Energy from Waste Regulation requires the EPA to refuse a licence for an activity or work prohibited by s 143(1) or (2).
13. Take s 4.42 of the EPA Act, for example. Section 4.42(1)(e) provides that an environment protection licence under Ch 3 of the POEO Act "cannot be refused if it is necessary for carrying out State significant development that is authorised by a development consent under this Division and is to be substantially consistent with the consent." "State significant development" is development that is declared under s 4.36 of the EPA Act to be "State significant development": s 4.36(1). A State environmental planning policy "may declare any development, or any class or description of development, to be State significant development": s 4.36(2). Currently, cl 2.6 of State Environmental Planning Policy (Planning Systems) 2021 (Planning Systems SEPP) declares that development is State significant development if the development is not permissible without development consent under Part 4 of the EPA Act and is specified in Sch 1 or 2. Waste and resource management facilities, which encompass an energy from waste facility, are specified in cl 23 of Sch 1 of Planning Systems SEPP. Accordingly, if development consent were to be granted to an energy from waste facility, such as the development proposed by Next Generation, s 4.42(1)(e) of the EPA Act would preclude the EPA from refusing an application to issue a licence authorising the carrying out of that development (which would be a scheduled activity at the premises).
14. Yet, as Next Generation submitted, s 143 of the Thermal Energy from Waste Regulation is inconsistent with this statutory mandate. Section 145 requires the EPA to refuse an application to issue a licence if granting the application would purport to authorise an activity or work prohibited by s 143(1) or (2). The inconsistency is stark: s 4.42(1)(e) of the EPA Act provides that the licence must not be refused but s 145 of the Thermal Energy from Waste Regulation provides that the licence must be refused.
15. Thirdly, Next Generation contended that the Thermal Energy from Waste Regulation is inconsistent with the licensing scheme and the POEO Act in restricting the carrying out of scheduled activities to the premises or precincts nominated in s 144 of the Thermal Energy from Waste Regulation. The POEO Act enables an occupier of premises to apply for a licence authorising the carrying out of a scheduled activity at any premises. The licence needs to specify the premises to which it applies (s 56(1)), but there is no restriction in the POEO as to the premises at which the activity may be authorised to be carried out. None of the statutory provisions regulating the making of an application for the issue of a licence (s 53), the consideration of the application (s 45) or the determination of the application (s 55), restricts the premises at which a scheduled activity may be carried out.
16. Next Generation submitted that the Thermal Energy from Waste Regulation is inconsistent with this "premises-agnostic" licensing scheme. Section 144 only exempts a person from committing an offence under s 143 if the activity or work prohibited by that section is carried out at the precincts or premises nominated in s 144(1).
17. Furthermore, s 145 of the Thermal Energy from Waste Regulation requires the EPA to refuse an application for the issue of a licence if the granting of the application would purport to authorise an activity or work prohibited by s 143, which Next Generation submitted would include an activity or work carried out at premises other than at the precincts or premises nominated at s 144(1).
18. Again, Next Generation submitted there is an inconsistency: the POEO Act enables a licence to be issued authorising the carrying out of a scheduled activity at any premises but the Thermal Energy from Waste Regulation precludes the grant of a licence authorising the scheduled activity to be carried out at any premises other than the nominated precincts and premises and makes it an offence to carry out the scheduled activity at the premises even if a licence has been issued authorising the carrying out of the scheduled activity at those premises.
19. Fourthly, Next Generation contended that the Thermal Energy from Waste Regulation is inconsistent with the POEO Act in making the carrying out of a scheduled activity at premises which is authorised by a licence an offence. Whilst the regulation-making power under s 323 of the POEO Act does enable a regulation to make an offence punishable by a penalty not exceeding the penalty specified in s 323(3), the regulation cannot create an offence for carrying out an activity or work that is authorised by a licence issued under the POEO Act.
20. Finally, Next Generation submitted that the Thermal Energy from Waste Regulation prohibits the grant of a licence for, and the carrying out of, the activity of thermal treatment of waste even at the precincts and premises nominated in s 144(1). In this respect, the Thermal Energy from Waste Regulation does not achieve the very thing it sought to achieve. This was because the Thermal Energy from Waste Regulation created both prohibitions and offences for breaching the prohibitions. Sections 143(2), 144(1) and (3) and 145 all refer to activity or work "prohibited by" s 143(1) or this Part. These are references to the prohibitions in s 143(1) or (2) to the carrying out of the activity or work referred to in those subsections. Section 143(3) makes it an offence to carry out the activity or work prohibited by the subsection. Section 144(1), (3) and (4) provide that a person is not guilty of an offence under s 143 if the circumstances in those subsections are satisfied, but this does not relax the prohibition. The activity or work prohibited by s 143(1) or (2) remains prohibited. A person would still be bound by the prohibition in s 143(1) or (2) not to carry out the activity or work specified in those subsections, notwithstanding that the person would not be guilty of an offence if the person carried out the activity or work in the circumstances specified in s 144(1), (3) or (4).
21. Similarly, Next Generation submitted that the EPA would still be bound to refuse an application for the issue of a licence authorising the carrying out of an activity or work at the precincts or premises nominated in s 144(1) or in the circumstances specified in s 144(3) or (4), as the granting of the application would purport to authorise an activity or work prohibited by this Part.
22. In these circumstances, Next Generation submitted that the Thermal Energy from Waste Regulation could not reasonably have been adopted as a means of fulfilling the purpose sought to be achieved of authorising the carrying out of the activity of thermal treatment of waste or work to enable that activity at the nominated precincts or premises or in the specified circumstances.

The rebuttal that the Thermal Energy from Waste Regulation is within power

1. The EPA rebutted Next Generation's assertions of inconsistencies between the Thermal Energy from Waste Regulation and the POEO Act and EPA Act. There may be differences in regulatory approach between the Thermal Energy from Waste Regulation and the statute, but those differences are authorised by the regulation-making power under s 323 of the POEO Act.
2. Section 323 of the POEO Act authorises the making of regulations "for or with respect to any matter that by this Act is required or permitted to be prescribed": s 323(1). Matters with respect to which regulations are permitted to be prescribed include the matters set out in Sch 2: s 323(2). One of the categories of matters set out in Sch 2 concerns waste, in cl 5 of Sch 2. The EPA submitted that subcll (1) and (6) in particular authorise the Thermal Energy from Waste Regulation.
3. A "waste facility", referred to in cl 5(1) of Sch 2, is defined in the Dictionary to the POEO Act to mean "any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations)". This definition is sufficiently broad to include a facility for the thermal treatment of waste. "Thermal treatment" of waste is defined in cl 50(1) of Sch 1 to POEO Act to mean "the processing of wastes by burning, incineration, thermal oxidation, gasification, pyrolysis, plasma or other thermal treatment processes."
4. The Thermal Energy from Waste Regulation makes provision for or with respect to the operation of waste facilities at which thermal treatment of waste is undertaken and the treatment, storage, processing, recovery, recycling, re-use or disposal of waste at waste facilities (the matters in cl 5(1) of Sch 2 to the POEO Act) and prohibiting or regulating the storage, processing, recovery, recycling, re-use or disposal of waste (the matters in cl 5(6) of Sch 2 to the POEO Act). Section 143(1) and (2) regulate the operation of waste facilities at which the thermal treatment of waste is undertaken by prohibiting the carrying out of the activity of thermal treatment of waste at premises and work that purports to enable that activity to be carried out at the premises. Clause 143(3) makes the carrying out of an activity or work prohibited by s 143(1) or (2) a strict liability offence. Section 144 provides that a person is not guilty of an offence under s 143 if the activity or work prohibited by s 143(1) or (2) is carried out on the precincts or premises nominated in s 144(1) or in the circumstances specified in s 144(3) or (4). Section 145 prohibits the EPA from granting a licence that would purport to authorise an activity or work prohibited by s 143(1) or (2).
5. The EPA submitted that, therefore, each of these provisions can be seen to be "for or with respect to" the matters in cl 5(1) and (6) of Sch 2 to the POEO Act, and hence are authorised by s 323(1) and (2) of the POEO Act.
6. The EPA submitted that once this is appreciated, the alleged inconsistencies raised by Next Generation are not inconsistencies at all, just reflections of a different, but authorised, regulatory approach to the approach in the POEO Act.
7. The EPA submitted that this is evident with the first alleged inconsistency between the permissive licensing scheme for scheduled activities under the POEO Act and the prohibition on the carrying out of the activity of thermal treatment of waste or work enabling the carrying out of that activity, and the granting of a licence that would purport to authorise that activity or work under the Thermal Energy from Waste Regulation. The EPA submitted that the prohibition in the Thermal Energy from Waste Regulation simply implements a different regulatory approach to the permissive licensing scheme under the POEO Act, but this approach is authorised by s 323(1) and (2) of the POEO Act, as being for or with respect to the matters in cl 5 of Sch 2 to the POEO Act.
8. The licensing scheme under the POEO Act does not cover the field of regulation that the regulation-making power authorises. The grant of a licence under s 55(1) authorising a scheduled activity to be carried out at specified premises does overcome the prohibition on, and the offence involved in, carrying out a scheduled activity at premises where Sch 1 indicates a licence is required for premises at which the activity is carried out: see s 48(1) and (2) of the POEO Act. But unless the licence expressly provides, merely holding a licence authorising a scheduled activity to be carried out at premises will not overcome other prohibitions in the POEO Act, such as on the pollution of water, air, noise or land.
9. Take the pollution of waters for example. A person who pollutes any waters is guilty of an offence: s 120(1) of the POEO Act. It is a defence in proceedings against a person for an offence under s 120(1) if the pollution of waters was regulated by a licence held by the person or another person and the conditions to which that licence was subject relating to the pollution of waters were not contravened: s 122(1) of the POEO Act. For this defence to be maintained, the licence must regulate and authorise the pollution of waters at the premises. If it does not, the defence will not be available - there will be no authority conferred by the licence to pollute waters.
10. The EPA submitted that this demonstrates that the mere grant of the licence authorising a scheduled activity be carried out at premises does not overcome any prohibition other than that in s 48 of the POEO Act: the licence would need to expressly authorise any other act, matter or thing that is prohibited by another provision of the POEO Act or regulations made under the POEO Act.
11. The EPA submitted that the structure of the legislative scheme under the POEO Act is similar to that discussed in State of South Australia v Tanner (1989) 166 CLR 161; (1989) 67 LGRA 84. There, the High Court considered a regulation made under the Waterworks Act 1932 (SA) which prohibited, and created an offence for, the erection of a piggery, zoo or feedlot on any land within a watershed. The applicant, who wished to erect an aviary, which was a type of zoo, as part of a proposed retail and commercial development in a watershed, argued that the regulation was repugnant to the prohibition on development without consent under the Planning Act 1982 (SA) (Planning Act) on the basis that (at [170]): "The former imposes a blanket and unqualified prohibition on a development; the latter permits a planning authority, having regard to the Plan, to give consent to the development. The regulation prohibits that which the latter Act may permit."
12. The majority of the High Court held (at [171]) that the regulation was not inconsistent with the Planning Act, because a consent under the Planning Act "removes the obstacle to development derived from s 47(5) of the Planning Act, but it does not confer a positive authority to proceed regardless of any other law."
13. The EPA submitted that, similarly in the present case, the grant of a licence under the POEO Act removes the obstacle to carrying out of scheduled activities on premises derived from s 48 of the POEO Act, but it does not confer a positive authority to proceed regardless of any other law, whether another provision in the POEO Act or regulations made under the POEO Act or a provision of any other Act, such as the EPA Act. A person still needs to comply with the other law.
14. The EPA also referred to the terms of the matters in cl 5(1), (2) and (5) of Sch 2 of the POEO Act as indicating that the power to make regulations can be exercised with respect to activities concerning waste ("whether or not they are required to be licensed under the Act"). By these words, the legislature contemplated that regulations may be made prohibiting and regulating activities that are required to be licensed, thereby allowing for different regulatory approaches between the licensing scheme under the POEO Act and the scheme under the Thermal Energy from Waste Regulation.
15. The EPA submitted, therefore, that regulations can be made under s 323 of the POEO Act prohibiting any act, matter or thing, including any activity or work, at premises, notwithstanding that the POEO Act regulates, by the licensing scheme, the carrying out of scheduled activities at premises. Such a regulation will not be inconsistent with the POEO Act but will be in furtherance of the regulation-making power under the POEO Act.
16. Hence, the EPA submitted that there is nothing inconsistent about the Thermal Energy from Waste Regulation prohibiting the carrying out of the activity of thermal treatment of waste, or work that purports to enable that activity, at premises, although the POEO Act provides for the issue of a licence authorising the carrying out of a scheduled activity involving the thermal treatment of waste at the premises. Both regulatory approaches are authorised.
17. The EPA submitted that s 145 of the Thermal Energy from Waste Regulation is also not inconsistent with the licensing scheme under the POEO Act, and s 55(1) in particular. Section 55(1)(a) does afford the EPA a discretion to grant or refuse an application for the issue of a licence. Section 145 of the Thermal Energy from Waste Regulation does require the EPA to refuse an application for the issue of a licence if granting the application would purport to authorise an activity or work prohibited by s 143(1) and (2). But that is simply a direction as to how the discretion afforded by s 55(1)(a) of the POEO Act is to be exercised. The EPA would still be exercising the power in s 55(1)(a) by making one of the two permitted decisions available, being to refuse rather than to grant the application. In this circumstance, there is no inconsistency between s 145 of the Thermal Energy from Waste Regulation and s 55(1)(a) of the POEO Act.
18. The EPA contested that any inconsistency between these provisions is revealed by having regard to s 55(2) of the POEO Act. That subsection does set preconditions that the EPA must satisfy before it can refuse an application for the issue of a licence. But these pre-conditions can still be satisfied if the EPA intends to refuse an application for the issue of a licence by reason of s 145 of the Thermal Energy from Waste Regulation. The EPA could give notice to the applicant that it intends to refuse the application (paragraph (a)); specify in the notice the reason for its intention to do so, being its belief that it is required to refuse the application by s 145 of the Thermal Energy from Waste Regulation (paragraph (b)); give the applicant a reasonable opportunity to make submissions in relation to the matter (paragraph (c)); and take into consideration any submissions by the applicant (paragraph (d)). The EPA submitted that following the steps required by s 55(2) would not be an exercise in futility. Although the EPA initially might be of the belief that refusal of the application is required by s 145, the applicant may be able to show, in its submissions, why s 145 does not apply or demand the refusal of the application. For example, the applicant may be able to establish that granting the application may not purport to authorise an activity or work prohibited by s 143(1) or (2) because the activity or work is not of a kind prohibited by those subsections, is to be carried out at a precinct or premises nominated in s 144(1), or satisfies the circumstances specified in s 144(3) or (4). It cannot be said, therefore, that s 145 of the Thermal Energy from Waste Regulation deprives s 55(2) of the POEO Act of any application, but rather is consistent with s 55(2) continuing to apply.
19. Equally, the EPA submitted, s 145 of the Thermal Energy from Waste Regulation does not rob the appeal provision, s 287 of the POEO Act, of any application. An applicant who is aggrieved with the EPA's decision to refuse the application for the issue of a licence can still appeal to the Court under s 287 of the POEO Act. On appeal, the applicant could contest the applicability of s 145 of the Thermal Energy from Waste Regulation to the application that the applicant has made. The applicant could seek to show, for example, that the activity or work for which the licence was sought is not prohibited by s 143(1) or (2), is to be carried out at precincts or premises nominated by s 144(1) or satisfies the circumstances specified in s 144(3) or (4). If the applicant were to succeed in establishing that s 145 does not apply, the Court would not be precluded from granting the application for the issue of a licence. The appeal provision, s 387 of the POEO Act, is therefore not robbed of application by s 145 of the Thermal Energy from Waste Regulation.
20. The EPA rebutted Next Generation's second alleged inconsistency, between the provisions of the EPA Act (ss 4.42, 4.50 and 5.24) that would require the grant of a licence and the provision of the Thermal Energy from Waste Regulation (s 145) that would require the refusal of the licence. The EPA accepted that, on their face, these different provisions require the EPA to make different decisions, either granting or refusing an application for the issue of a licence, but this apparent conflict can be resolved by ordinary principles of statutory construction. The EPA submitted that, on a proper construction, the provisions of the EPA Act that require the EPA to grant an application for the issue of a licence prevail over s 145 of the Thermal Energy from Waste Regulation in the event of inconsistency. This is the interpretive outcome contemplated by the note to s 145 - a licence cannot be refused if it is necessary to carry out State significant development authorised by a development consent (see s 4.42 of the EPA Act) or approved State significant infrastructure (see s 5.24 of the EPA Act). This is not to use the note in the interpretation of the provision, but simply to corroborate the proper construction of the provision. To construe the provisions in the EPA Act as prevailing over s 145 of the Thermal Energy from Waste Regulation in the event of inconsistency is not to find s 145 to be invalid - it remains a valid provision but gives way to the provisions of the EPA Act in the event of inconsistency.
21. The EPA submitted that this construction of s 145 of the Thermal Energy from Waste Regulation implements the interpretive principle that an instrument is to be construed as operating to the full extent of, but so as not to exceed, the legislative power (see s 31(1) of the Interpretation Act 1987 (NSW)) or the regulation-making power (see s 32(1) of the Interpretation Act 1987 (NSW)): see Hamzy v Commissioner of Corrective Services NSW (2022) 107 NSWLR 544; [2022] NSWCA 16 at [186]-[187].
22. The EPA contested Next Generation's third alleged inconsistency, between the POEO Act's premises-agnosticism and the Thermal Energy from Waste Regulation's nomination of precincts and premises. The EPA accepted that the licensing scheme under the POEO Act allows for the issue of a licence authorising the carrying out of a scheduled activity at any premises specified in the licence, and s 144(1) and (2) of the Thermal Energy for Waste Regulation nominates precincts and premises which the activity or work prohibited by s 143(1) or (2) may be carried out. But the EPA submitted that such nomination of precincts or premises at which activity or work can be carried out is authorised by the regulation-making power in s 323 of the POEO Act. Regulations may be made for or with respect to the matters set out in Sch 2 to the POEO Act, including the matters relating to waste in cl 5 of Sch 2. The matters of the operation of waste facilities and the treatment, storage, processing, recovery, recycling, re-use or disposal of waste at waste facilities, and the prohibiting and regulating of the storage, processing, recovery, recycling, re-use or disposal of any waste, are broad enough to authorise the making of a regulation restricting the locations at which waste facilities can operate and the specified activities with respect to waste that can be carried out.
23. The EPA submitted that Next Generation's fourth alleged inconsistency is contrary to the clear words of the regulation-making power. Section 323(3) of the POEO Act expressly authorises regulations to create offences, although it limits the penalty for an offence created by the regulation to the penalties specified by the subsection. This provision authorised s 143 of the Thermal Energy from Waste Regulation to create offences for carrying out an activity or work prohibited by s 143(1) or (2).
24. The EPA submitted that to create such offences is not otherwise inconsistent with the POEO Act. It may be accepted that the POEO Act makes it an offence to carry on a scheduled activity or premises without a licence: s 48(2) of the POEO Act. But for the reason the EPA had already advanced, the regulation-making power under s 323 of the POEO Act authorises the making of regulations prohibiting, and creating an offence for, the carrying out of activities or work at premises regardless of whether a licence has been obtained.
25. The EPA contested the construction of Pt 4 of Ch 9 of the Thermal Energy from Waste Regulation that founded Next Generation's final alleged inconsistency. This was that the prohibition of the carrying out of the activity or work was distinct from the offence of carrying out the prohibited activity or work. The EPA submitted that the prohibition and the offence are one and the same. Thus, the reference in s 145 to "an activity or work prohibited by this Part" is a reference to an activity or work that, under s 143, a person is prohibited from, and would commit an offence for, carrying out. Section 143(1) and (2) create both the prohibition and the offence. Section 143(3), by stating that "an offence under this section is a strict liability offence", acknowledges the offence is created elsewhere in the section, which can only be by subs (1) and (2). Section 144(1), (3) and (4) reference both the offence "under s 143" and the activity or work "prohibited by the section", but read in context the offence and the prohibition are created by the same provisions, being s 143(1) and (2). The consequence is that s 144(1), (3) and (4) operate not only to cause a person to be not guilty of an offence under s 143 if the exceptions in those subsections are met but also to cause the activity or work referred to in s 143(1) or (2) not to be prohibited by section 143 and hence, by "this Part" of the Thermal Energy from Waste Regulation.
26. The EPA submitted that, on this construction, there is no inconsistency in the way alleged by Next Generation. The Part is able to operate as intended. A licence can be granted to authorise an activity or work referred to in s 143(1) or (2) to be carried out in the precincts or premises nominated in s 144(1) or (2) or in the circumstances specified in s 144(3) or (4).
27. The EPA referred to the explanatory note to the Thermal Energy from Waste Regulation when made: Explanatory note The object of this Regulation is to amend the Protection of the Environment Operations (General) Regulation 2021 to - (a) impose a prohibition on - (i) the thermal treatment of waste that involves or results in energy recovery, and (ii) work carried out to enable the activity to be carried out, and (b) provide for exceptions to the prohibition, including if - (i) the activity or work is carried out at certain precincts or premises, or (ii) the activity is an established and operating activity at the premises immediately before the prohibition comes into force, or (iii) the activity is carried out to replace a less environmentally sound fuel in certain circumstances.
28. The EPA submitted that this corroborates the construction it advanced as the proper construction of the Thermal Energy from Waste Regulation. The regulation imposes a prohibition and provides for exceptions to the prohibition and creates an offence for breaching the prohibition unless the exceptions to the prohibition are met. The regulatory scheme is coherent and workable.
29. The EPA submitted that this construction also implements the principle of construction in s 31(1) and s 32(1) of the Interpretation Act that the regulatory provision should be construed as operating to the full extent of, but so as not to exceed, the legislative power and the regulation-making power.

The Thermal Energy from Waste Regulation is within power

1. The Thermal Energy from Waste Regulation is a proper exercise of the regulation-making power under s 323 of the POEO Act, for the reasons given by the EPA, which I have summarised above and adopt.
2. First, the Thermal Energy from Waste Regulation is "for or with respect to" matters that by the POEO Act are permitted to be prescribed, being the matters set out in cl 5 of Sch 2 to the POEO Act. The breadth of description of these matters, particularly the matters in cl 5(1) and (6) of Sch 2, is sufficient to support each of the provisions in the Thermal Energy from Waste Regulation. The provisions regulate and prohibit the operation of waste facilities at which thermal treatment of waste is undertaken and, at least, the treatment, processing or disposal of waste at waste facilities, which are matters set out in cl 5(1) and (6). Section 143 prohibits the carrying out of the activity of thermal treatment of waste and work that purports to enable the activity to be carried out at the premises. Section 144 provides for exceptions to the prohibition on the carrying out of that activity or work. Section 145 regulates the decision to grant or refuse an application for the issue of a licence to authorise that activity or work.
3. Not only is the Thermal Energy from Waste Regulation for or with respect to matters that by the POEO Act are permitted to be prescribed, being matters set out in cl 5 of Sch 2 to the POEO Act, it is "not inconsistent with" the POEO Act. As the EPA submitted, the Thermal Energy from Waste Regulation does adopt a different regulatory approach to the licensing scheme in the POEO Act. The Thermal Energy from Waste Regulation does add prohibitions on the carrying out of an activity or work referred to in s 143(1) or (2) at premises, and provides for exceptions to those prohibitions (in s 144), to the prohibition in the POEO Act on carrying on scheduled activities on premises without a licence (in s 48 of the POEO Act). However, this does not make the Thermal Energy from Waste Regulation inconsistent with the POEO Act. There are already prohibitions in the POEO Act and regulations made under the POEO Act on doing acts, matters or things additional to the prohibition on carrying out scheduled activities on premises without a licence. A person is obliged to comply with all of the prohibitions in the POEO Act and regulations, not only the prohibition on carrying out scheduled activities on premises without a licence. The Thermal Energy from Waste Regulation has simply added other prohibitions with which a person must comply. This does not make the regulation inconsistent with the POEO Act.
4. The mandate in s 145 of the Thermal Energy from Waste Regulation that the EPA must refuse an application for the issue of a licence authorising an activity or work prohibited by s 143(1) or (2) is also not inconsistent with the discretionary power in s 55(1)(a) of the POEO Act to grant or refuse a licence. Section 145 simply directs that that power be exercised in a particular way (by refusal) if the circumstances specified in the section exist. There is no inconsistency between the two provisions.
5. Equally, there is no inconsistency between s 145 of the Thermal Energy from Waste Regulation and s 55(2) of the POEO Act. If the EPA intends to refuse an application for licence because it believes s 145 of the Thermal Energy from Waste Regulation requires it to do so, the EPA can still comply with s 55(2) of the POEO Act by taking the four steps that the subsection requires. As the EPA submitted, this would still achieve the purpose of s 55(2) as the applicant would be afforded an opportunity to persuade the EPA that s 145 does not apply or require the refusal of the application. The two provisions are not inconsistent and can work together.
6. There is no inconsistency in the third way Next Generation contended. Whilst the licensing scheme under the POEO Act does enable a licence to be issued authorising the carrying out of the scheduled activities at any premises specified in the licence, and the Thermal Energy from Waste Regulation only enables a licence to be issued authorising the carrying out of the activity of thermal treatment of waste at the nominated precincts or premises, this does not result in the Thermal Energy from Waste Regulation being inconsistent with the POEO Act. The regulation-making power under s 323 of the POEO Act is broad enough to allow the making of a regulation restricting the locations at which the activity of thermal treatment of waste can be carried out. A regulation made pursuant to that power is not inconsistent with the POEO Act.
7. The Thermal Energy from Waste Regulation is not inconsistent with the POEO Act in the fourth way contended by Next Generation. The regulation-making power expressly authorises a regulation to create an offence (s 323(3) of the POEO Act). That offence can be additional to any offence created by the POEO Act. Once it is recognised that the regulation-making power enables the making of a regulation prohibiting the carrying out of the activity of the thermal treatment of waste, or work that purports to enable that activity at premises, the power can be seen to extend to enable creating an offence for breaching that prohibition.
8. The fifth inconsistency between the Thermal Energy from Waste Regulation and the POEO Act that Next Generation advanced depended on a construction of the Thermal Energy from Waste Regulation that is incorrect. As the EPA submitted, the prohibition on the carrying out of the activities or work referred to in s 143(1) and (2) and the offence for breaching that prohibition are coterminous. I adopt the reasons the EPA advanced that I have earlier summarised. The Thermal Energy from Waste Regulation prohibits in s 143(1) and (2) the carrying out of the activity of thermal treatment of waste and work that purports to enable that activity, but provides for exceptions to that prohibition in s 144(1), (3) and (4), and creates an offence for breaching the prohibition unless the exceptions apply. It is in this sense that s 145 refers to "an activity or work prohibited by this Part". The Part includes both the prohibition and the offence created by s 143 and the exceptions to the prohibition and offence in s 144. An activity or work is prohibited by the Part if it not only is an activity or work prohibited by s 143, but also does not meet the exceptions to the prohibition in s 144. On this construction, the Part achieves its purpose - there is no inconsistency between its provisions and its purpose.
9. I conclude with the second inconsistency claimed by Next Generation - the inconsistency between the requirement in s 145 of the Thermal Energy from Waste Regulation for refusal of an application to issue a licence in the circumstances specified in s 145 and the requirements in provisions of the EPA Act (ss 4.42, 4.50 and 5.24) for approval of an application to issue a licence in the circumstances specified in those provisions. There may be circumstances where these provisions of the Thermal Energy from Waste Regulation and the EPA Act are in conflict, but that conflict is readily able to be resolved by determining which provision is to prevail in the event of inconsistency. On a proper construction, the provisions of the EPA Act prevail over s 145 of the Thermal Energy from Waste Regulation in the event of inconsistency. That interpretive outcome is recognised by the note to s 145 of the Thermal Energy from Waste Regulation. Notwithstanding the terms of s 145, a licence cannot be refused if it is necessary to carry out State significant development authorised by a development consent (s 4.42) or approved State significant infrastructure (s 5.24). To this note it may be added that a licence cannot be refused if it is necessary to carry out integrated development authorised by a development consent (s 4.50).
10. For these reasons, Next Generation has not established that the Thermal Energy from Waste Regulation is inconsistent with the POEO Act or, to the extent that it could be inconsistent with the EPA Act, that that inconsistency is not able to be resolved by construing the EPA Act as prevailing over the Thermal Energy from Waste Regulation. In these circumstances, Next Generation has not established that the Thermal Energy from Waste Regulation is in excess of the legislative power or regulation-making power.

Conclusion and orders

1. As Next Generation has not established any ground of judicial review of the Thermal Energy from Waste Regulation, its summons should be dismissed. Costs should follow the event.
2. The Court orders: 1. The summons is dismissed. 2. The applicant is to pay the respondent's costs of the proceedings.

Amendments 29 May 2023 - Amendment at [10], correcting reference to POEO Act to Thermal Energy from Waste Regulation. 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: 29 May 2023