[1909] HCA 56
Country Road Board v Neale Ads Pty Ltd (1930) 43 CLR 126
[1930] HCA 5
Criminale v State Authorities Superannuation Board [1989] HCA 48
(1989) 63 ALJR 665
De Le v Director-General, Department of Community Services (NSW) (1990) CLR 207
[1997] HCA 14
De L v Director-General, Department of Community Services (NSW) (1996) 187 CLR 640
Source
Original judgment source is linked above.
Catchwords
[1909] HCA 56
Country Road Board v Neale Ads Pty Ltd (1930) 43 CLR 126[1930] HCA 5
Criminale v State Authorities Superannuation Board [1989] HCA 48(1989) 63 ALJR 665
De Le v Director-General, Department of Community Services (NSW) (1990) CLR 207[1997] HCA 14
De L v Director-General, Department of Community Services (NSW) (1996) 187 CLR 640[1996] HCA 5
Falcon v Famous Players Film Co Ltd [1926] 2 KB 474
Hamzy v Commissioner of Corrective Services (NSW) (2022) 107 NSWLR 544[2022] NSWCA 16
Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402[1951] HCA 42
Paull v Munday (1976) 50 ALJR 551
Pidoto v Victoria (1943) 68 CLR 87[1943] HCA 37
Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1[2012] HCA 46
Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42[2012] HCA 16
Shanahan v Scott (1957) 96 CLR 245[1957] HCA 4
South Australia v Tanner (1989) 166 CLR 161[1989] HCA 3
Stevens v Perrett (1935) 53 CLR 449Mr D Hume (Appellant)
Mr R Lancaster SCMs R Mansted (Respondent)
Judgment (17 paragraphs)
[1]
Background
In April 2015, Next Generation lodged a "State significant development" application under the EPA Act seeking development consent for the construction and operation of an energy from waste facility on land at Honeycomb Drive, Eastern Creek (the premises). The proposed facility would generate electricity from the thermal treatment of waste such as by burning or incinerating waste. The Independent Planning Commission (the "IPC") refused the application in July 2018.
On 14 January 2019, Next Generation filed "Class 1 proceedings" in the Land and Environment Court appealing the IPC's refusal of the application.
On 8 July 2022, the Protection of the Environment Operations (General) Amendment (Thermal Energy from Waste) Regulation 2022 (NSW) came into force. It inserted Pt 3A of Ch 8 into the Environment Operations (General) Regulation 2021 (NSW) (the "2021 General Regulation"). Part 3A of Ch 8 is identical to the Thermal Energy from Waste Regulation.
In August 2022, two of the respondents to the Class 1 proceedings, being the IPC and Blacktown City Council, filed Amended Statements of Facts and Contentions contending that the proposed development was inconsistent with Pt 3A of Ch 8 of the 2021 General Regulation. This inconsistency was said to arise as the proposed development was not to take place in one of the precincts nominated in (the equivalent of) reg 144 of the Thermal Energy from Waste Regulation where thermal energy from waste facilities were permitted to operate.
On 8 August 2022, Next Generation commenced separate proceedings in the Land and Environment Court's class 4 jurisdiction challenging the validity of Pt 3A of Ch 8 of the 2021 General Regulation.
On 1 September 2022, the Environment Operations (General) Regulation 2021 (NSW) was repealed and replaced by the Protection of the Environment Operations (General) Regulation 2022 (NSW) (the "2022 General Regulation"). Pt 3A of Ch 8 of the 2021 General Regulation was re-enacted as Pt 4 of Ch 9 of the 2022 General Regulation (i.e the Thermal Energy from Waste Regulation). Next Generation amended its summons in the Land and Environment Court to reflect that change.
On 24 November 2022, Preston CJ delivered the judgment the subject of this appeal (The Next Generation (NSW) Pty Ltd v State of New South Wales [2022] NSWLEC 138; "Next Gen").
On 16 December 2022, the State Environmental Planning Policy (Transport and Infrastructure) Amendment (Thermal Energy from Waste) 2022 (NSW) was made under s 3.29 of the EPA Act. The respondent, the State of New South Wales (the "State"), contends that this amendment is fatal to ground 2 of the appeal. The effect of this amendment and the debate over its relevance to this appeal is addressed below.
[2]
The Thermal Energy from Waste Regulation
Within Pt 4 of Ch 9 (of the 2022 General Regulation), reg 143 relevantly provides:
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) An offence under this section is a strict liability offence.
Regulation 142 defines "thermal treatment" by reference to the definition in cl 50(1) of Sch 1 to the POEO Act (with certain activities exempted). That definition provides that "thermal treatment means the processing of wastes by burning, incineration, thermal oxidation, gasification, pyrolysis, plasma or other thermal treatment processes" (emphasis added). Regulation 142 also defines "waste" by reference to the definition in the POEO Act (although certain fuels are exempted). The Dictionary to the POEO Act has an extensive definition of "waste" which includes, for example, "any discarded, rejected, unwanted, surplus or abandoned substance" and "any substance prescribed by the regulations to be waste".
Regulation 144 provides for three exceptions to the prohibitions in reg 143, namely, work carried out at nominated "precincts" or "premises" (reg 144(1)), work that is an "established and operating activity" before 8 July 2022 (reg 144(3)) or work where the activity to be carried out "replace[s] the use of a less environmentally sound fuel" (reg 144(4)(a)) (along with other various other conditions which are not presently relevant: regs 144(4)(b)−(d)).
Regulation 145 provides:
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 "note" to this regulation states, "[a] licence cannot be refused if it is necessary for carrying out State significant development authorised by a development consent or approved State significant infrastructure - see the Environment Planning and Assessment Act 1919, sections 4.42 and 5.24." This note does not form part of the POEO Act (Interpretation Act 1987 (NSW), s 35(2)).
[3]
The Regulation-Making Power and the POEO Act
Section 323 of the POEO Act confers a power to make regulations. It relevantly 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.
...
(5) Nothing in this section limits or restricts the conditions that may be attached to a licence, but any such condition that is inconsistent with a regulation has no force or effect.
(5A) Despite subsection (5), a condition of a licence may be inconsistent with a requirement of the same kind in a regulation, but only to the extent that the condition imposes a more stringent requirement than the regulation. (emphasis added)
Subsection 323(2) extends the scope of the regulation-making power to the matters in Sch 2 to the POEO Act. Of relevance to regs 143 and 145 are the matters specified in cll 5 and 8 of Sch 2:
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.
...
8 Licences - generally
(1) The issue, transfer, conditions, variation, surrender, review, suspension or revocation of licences.
(2) Applications for the issue, transfer, variation or surrender of a licence (including the amendment of such applications).
(3) Any matter that may be regulated by the conditions of a licence.
(4) Imposing conditions on licences and revoking or varying conditions on licences (whether or not the conditions have been imposed by the regulations). (emphasis added)
[4]
The EPA Act
Ground 1(b) of Next Generation's appeal concerns an apparent inconsistency between reg 145 and ss 4.42(1) and 5.24(1) of the EPA Act. Relevantly, s 4.42(1) provides:
(1) An authorisation of the following kind 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 -
...
(e) an environment protection licence under Chapter 3 of the Protection of the Environment Operations Act 1997 (for any of the purposes referred to in section 43 of that Act)
There are certain presently immaterial exceptions to s 4.42(1), including that it does not apply during "any period after the first review of the licence under section 78" of the POEO Act (s 4.42(2)(c)).
Section 5.24 of the EPA Act is found within Div 5.2 which concerns "State significant infrastructure". Similar to s 4.42(1), s 5.24(1) provides that certain kinds of authorisations, which include an environment protection licence granted under Ch 3 of the POEO Act (s 5.24(1)(e)), cannot be refused if they are "necessary for carrying out approved State significant infrastructure and [are] to be substantially consistent with the approval".
As noted, the State sought to rely on the amendment made to the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW) which inserted Div 28 into Pt 2.3 as follows ("Div 28"):
2.171 Prohibited development
(1) Development is prohibited if it -
(a) involves, or is carried out to enable, the thermal treatment of waste involving or resulting in energy recovery from the waste, and
(b) is on land identified on the Thermal Energy from Waste Prohibition Map - Greater Sydney, and
(c) is prohibited by the Protection of the Environment Operations (General) Regulation 2022, Chapter 9, Part 4.
(2) This section prevails to the extent of an inconsistency over -
(a) another provision of this Policy, and
(b) the provisions of another environmental planning instrument.
(3) A word or expression used in this section has the same meaning as in the Protection of the Environment Operations (General) Regulation 2022, Chapter 9, Part 4.
(4) …
The development prohibited by cl 2.171(1) appears to be co-extensive with the activity prohibited by the Thermal Energy from Waste Regulation (namely reg 143). Section 4.38(2) of the EPA Act provides that development consent cannot be granted in respect of State significant development "if the development is wholly prohibited by an environmental planning instrument".
[5]
Primary Judgment
The primary judge addressed five related contentions made by Next Generation concerning the validity of the Thermal Energy from Waste Regulation.
First, his Honour found that 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 cll 5(1) and (6) of Sch 2 to the POEO Act. [2] His Honour also found that the Thermal Energy from Waste Regulation was not inconsistent with the POEO Act, including Ch 3, in that it only "added other prohibitions with which a person must comply" in addition to those created by the licensing regime in Ch 3 of the POEO Act. [3] Next Generation's argument on appeal was specifically directed to this conclusion.
Further, the primary judge did not accept that reg 145 was inconsistent with s 55 of the POEO Act as his Honour found that reg 145 merely directs that the power to grant a licence conferred by s 55 is to be exercised in a particular way (and the procedure for refusal in s 55(2) can still be complied with). [4] Next Generation did not pursue this argument on appeal save for contending that, if reg 143 is invalid, then reg 145 is also invalid (along with the balance of the Thermal Energy from Waste Regulation).
Second, his Honour addressed the contention that reg 145 was inconsistent with ss 4.42 and 5.24 of the EPA Act by finding as follows: [5]
"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."
This aspect of his Honour's reasoning is the subject of ground 2 of the appeal. Next Generation contends that it follows from the conclusion in the second sentence of this extract that reg 145 is at least partly invalid and declaratory relief to that effect should have been granted. The State contends that the effect of Div 28 is that there are now no "circumstances where these provisions of the Thermal Energy from Waste Regulation and the EPA Act are in conflict".
Third, the primary judge rejected the contention that, because the Thermal Energy from Waste Regulation restricts the carrying out of forms of treatment to waste at particular locations, it is inconsistent with so much of Ch 3 of the POEO Act which permits the licensing of scheduled activities at "any premises" (s 43). His Honour found that s 323 was "broad enough" to enable regulations to be made which addressed the thermal treatment of waste at particular locations. [6]
[6]
Ground 1(a): Inconsistency of Regulation with ss 43 and 48 of the POEO Act
Ground 1(a) of Next Generation's notice of appeal contends that the primary judge erred "in failing to conclude that Part 4 of Chapter 9 … was, in whole or in part, invalid by reason of… inconsistency with the [POEO Act] including, in particular, ss 43 and 48". This ground is related to ground 2, which contends that his Honour ought to have found that Pt 4 of Ch 9 was invalid, either in whole or in part. Ground 2 has no separate content.
[7]
Scope of Power to Make Regulations: Principles
In Shanahan v Scott (1957) 96 CLR 245 at 250; [1957] HCA 4, Dixon CJ, Williams, Webb and Fullagar JJ observed as follows in relation to a power to make regulations that is considered necessary or expedient for the administration of an Act or the carrying out its objects:
"[S]uch a power does not enable the authority by regulations to extend the scope or general operation of the enactment but is strictly ancillary. It will authorise the provision of subsidiary means of carrying into effect what is enacted in the statute itself and will cover what is incidental to the execution of its specific provisions. But such a power will not support attempts to widen the purposes of the Act, to add new and different means of carrying them out or to depart from or vary the plan which the legislature has adopted to attain its ends."
The regulation-making power conferred by s 323 of the POEO Act is conditioned by the requirement that any regulations made must not be inconsistent with the POEO Act, although such a requirement would be otherwise implicit if not expressly stated (see Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1; [2012] HCA 46 at [54] per French CJ; "Plaintiff M47"). At least one form of inconsistency arises where the regulation in question varies, departs, or "alters, impairs or detracts from" the provisions of the empowering Act (Plaintiff M47 at [174] per Hayne J; see also at [134] per Gummow J).
The scope of the regulation-making power must be considered in light of the approach taken by the relevant statute in regulating the subject matter with which it deals. Thus, in Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402; [1951] HCA 42 ("Morton") the High Court stated (at 410):
"The ambit of the [regulation-making] power must be ascertained by the character of the statute and the nature of the provisions it contains. An important consideration is the degree to which the legislature has disclosed an intention of dealing with the subject with which the statute is concerned.
In an Act of Parliament which lays down only the main outlines of policy and indicates an intention of leaving it to the Governor-General to work out that policy by specific regulation, a power to make regulations may have a wide ambit. Its ambit may be very different in an Act of Parliament which deals specifically and in detail with the subject matter to which the statute is addressed. In the case of a statute of the latter kind an incidental power of the description contained in s. 164 [of the Excise Act 1901-1949] cannot be supposed to express an intention that the Governor-General should deal with the same matters in another way." (emphasis added)
[8]
Regulation 143: Required or Permitted to be Prescribed under the POEO Act
The principal focus of Next Generation's written and oral submissions was the contention that the Thermal Energy from Waste Regulation, especially reg 143, was "inconsistent" with the POEO Act and thus not authorised by s 323(1) (and therefore invalid). However, in its written submissions in reply [10] and oral submissions [11] an argument emerged which, if accepted, meant that reg 143 was not authorised by the regulation-making power i.e. it was not a regulation made "with respect to any matter" that by the POEO Act is "required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect" to the POEO Act (s 323(1)), including any matters set out in Sch 2 (s 323(2)).
Next Generation submitted that reg 143 was not a regulation for or with respect to either cll 5(1) or (6) of Sch 2 to the POEO Act. It contended that, although cl 5(1) concerns the operation of "waste facilities", it does not extend to the prohibition on conducting a waste facility and that while cl 5(6) authorises the making of regulations that include a prohibition, such a regulation can only concern "waste" and not "waste facilities". According to Next Generation, when cll 5(1) and (6) are read together, cl 5(1) is addressed to "waste facilities" but does not encompass its prohibition and cl 5(6) is directed to what may be done with waste other than at waste facilities. [12] Next Generation contended that reg 143 is "directed to prohibiting activities at 'waste facilities' ie facilities used for processing waste" and does not merely regulate an activity or right which otherwise exists (citing Co-operative Brick Co Pty Ltd v City of Hawthorn (1909) 9 CLR 301 at 307; [1909] HCA 56) (emphasis added). It is said to follow that reg 143 is not a regulation that makes provision for or with respect to any matter set out in Sch 2 to the POEO Act.
This contention can be disposed of briefly. As noted, the definitions of "thermal treatment" and "waste" mean that the "thermal treatment of waste" (as referred to in reg 143(1)) is a form of "processing… of… waste" (as referred to in cl 5(6) of Sch 2 to the POEO Act). When read with s 323 of the POEO Act, cl 5(6) confers a power to prohibit, regulate or do both, as well as to prohibit conditionally or unconditionally (Country Road Board v Neale Ads Pty Ltd (1930) 43 CLR 126 at 134-135; [1930] HCA 5).
[9]
(Alleged) Inconsistency Between Regulation 143 and Chapter 3 of the POEO Act: Submissions
Next Generation's principal contention is that reg 143 is "inconsistent" with the POEO Act in that it purports to proscribe what is "authorised" by s 43 of the POEO Act. [13] Next Generation submitted that s 43 demonstrates that the "purpose" of an environment protection licence is to "authorise the carrying out of" of certain activities. Next Generation contended that various provisions of Ch 3 of the POEO Act recognise that what is conferred by an environment protection licence is an "authority" to act and that the POEO Act implicitly recognises that an environment protection licence "brings with it an authority to carry out the activities the subject of the licence".
According to Next Generation, by proscribing the carrying out of activities that are within the scope of "authority" granted by an environment protection licence granted under Chapter 3 of the POEO Act, the Thermal Energy from Waste Regulation "varies or departs from the [POEO] Act because it proscribes that which the [POEO] Act authorises". To similar effect, it contended that the scheme of regulation of "controlled activities" (i.e. Sch 1 activities) contemplated by the POEO Act is regulated by conditions attached to licences, especially so far as "waste" and "waste facilities" are concerned. It submitted that the Thermal Energy from Waste Regulation varies or departs from the scheme of regulating controlled activities by "attach[ing] conditions on environment protection licences", "add[s] new and different means of carrying out the purposes of the [POEO] Act" and "attempt[s] to widen the purposes of the [POEO] Act".
The State submitted that the POEO Act evinces an intention that regulations made under it "are likely to have a wide degree of overlap… with the licensing regime" in Ch 3 such that the licensing regime is subject to significant modification by the regulations. The State submitted that the "authority" granted by a licence under Ch 3 is very limited in that its function is to preclude the operation of provisions, such as s 48, that make the conduct the subject of the licence an offence (citing South Australia v Tanner (1989) 166 CLR 161 at 171-172; [1989] HCA 3; "Tanner").
The State's submissions noted a number of offences under the POEO Act that incorporate a breach of the regulations where it is irrelevant whether or not the alleged contravenor possessed a licence. For example, s 117(1) of the POEO Act provides that it is an offence if a person "wilfully or negligently causes any controlled substance (within the meaning of the Ozone Protection Act 1989) to be emitted into the atmosphere in contravention of the regulations under that Act and in a manner that harms or is likely to harm the environment". The State submitted that the POEO Act evinces a clear intention that the licensing regime in Ch 3 and regulations made under the Act operate concurrently such that the latter may impose additional restrictions on some activity that is licensed under Ch 3, and in some cases prohibit it altogether.
[10]
Regulation 143 and Chapter 3 of the POEO Act are not relevantly inconsistent
The power to make regulations under s 323(1) of the POEO Act is circumscribed by the requirement that they not be "inconsistent" with the POEO Act. Ascertaining whether reg 143 is relevantly inconsistent with the POEO Act turns upon a consideration of two related matters: first, the extent of the "authority" conferred by a licence granted under Ch 3 and, second, what the POEO Act contemplates to be the scope of the regulation-making power. As noted, s 323 and the other provisions of the Act which concern the scope of the regulation-making power are to be considered when determining whether a regulation is relevantly inconsistent.
In seizing upon the phrase "authorise" in s 43(a)−(c) of the POEO Act, Next Generation relied on the observation of Gummow and Hayne JJ in Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16 at [122] that, "[a]s a matter of ordinary usage 'to authorise' is to clothe with authority, particularly legal authority, thereby give a right to act". Their Honours noted this possible meaning in the context of considering whether an internet provider had "authorise[d]" the doing of any act by its customers that comprised the copyright owned by another person for the purposes of s 101(1) of the Copyright Act 1968 (Cth). Their Honours also noted at [125] that other cases had concluded that "authorise" should be taken to mean "sanction, approve, [or] countenance", citing Falcon v Famous Players Film Co Ltd [1926] 2 KB 474 at 491. However, even if one accepts that "authorise" in this context means to "clothe with authority", it only begs the question, what legal authority does a licence granted under Ch 3 of the POEO Act confer?
The "authoris[ation]" to carry out scheduled development activities at any premises "conferred" by s 43(b) of the POEO Act is qualified by the words, "as required under section 48". Section 48 only "requires" an authorisation in the sense that, absent such authority, a person who occupies any premises at which scheduled activities are carried out is guilty of an offence. No other provision of Ch 3, or the balance of the POEO Act, expressly or impliedly, confers any form of legal permission much less any right on the holder of the licence. On its face, the "authority" conferred by such a licence is relatively limited. It is not an "authority" to engage in the scheduled activities generally but simply an "authority" in the sense of having a lawful excuse to do what s 48 otherwise prohibits.
[11]
Inconsistency Between Regulation 145 and the POEO Act
Next Generation's written submissions attacked the primary judge's reasons for rejecting the contention that reg 145 was inconsistent with s 55(1)(a) of the POEO Act (see above at [37]). The written submission contended that s 55(1)(a) confers a discretion to grant or refuse an application for an environment protection licence but reg 145 denies the power to do so. However, in oral submissions, Senior Counsel for Next Generation disclaimed any challenge to the validity of reg 145 on the basis of inconsistency with the POEO Act separate from that made to reg 143. Instead, it was submitted that if reg 143 was invalid on the basis of inconsistency, then it followed that reg 145 (and the balance of the Thermal Energy from Waste Regulation) was also invalid. [14] As I do not consider that reg 143 is invalid, that argument does not arise.
[12]
Conclusion on Ground 1
I would reject ground 1(a) of the appeal and the corresponding part of ground 2.
[13]
Ground 1(b): Inconsistency with the EPA Act
Ground 1(b) of Next Generation's notice of appeal contends that "[t]he primary judge erred in failing to conclude that Part 4 of Chapter 9 …. was, in whole or in part, invalid by reason of… inconsistency with the [EPA Act] including, in particular, s 4.42(1)(e)". As with ground 1(a), this ground is related to ground 2 which contends that his Honour ought to have found that Pt 4 of Ch 9 was invalid, either in whole or in part.
Next Generation's submissions in relation to this ground referred to the primary judge's findings that reg 145 was inconsistent with the provisions of the EPA Act noted above and that "[o]n 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" (see [38]). [15] Next Generation submitted that, as the regulation-making power conferred by the POEO Act does not carry with it the power to amend other statutes, then "[r]egulation 145 was invalid ab initio to the extent to which it purported to prohibit that which the [EPA Act] required". Next Generation sought declaratory relief to reflect that conclusion. (Next Generation also submitted that the partial invalidity of reg 145 supported its contention that the invalidity of reg 143 warrants a conclusion that the entirety of the Thermal Energy from Waste Regulation is invalid. As I do not accept that reg 143 is invalid, it is not necessary to address this contention.)
The State accepted that reg 145 does not prevail over the provisions of the EPA Act set out above. The State noted that s 7(2) of the POEO Act provides that the Act prevails over any other Act or statutory rule to the extent of any inconsistency but that "a regulation made under the POEO Act only prevails over any statutory rule to the extent of any inconsistency". The State accepted it was implicit that the provisions of another Act, such as the EPA Act, prevail over a regulation made under the POEO Act to the extent of any inconsistency. The State submitted that the primary judge's reasons should be read as effectively preserving the operation of reg 145 by reading it down to remove any inconsistency as contemplated by ss 31 and 32 of the Interpretation Act.
As noted, the State also submitted that the effect of Div 28 is to remove the practical potential for there to be any inconsistency between reg 145 and the provisions of the EPA Act noted above. I address that contention separately below.
[14]
Inconsistency of a Regulation with another Act
The above provisions of the EPA Act were enacted on 1 March 2018 well before the Thermal Energy from Waste Regulation was made. The authorities reflect Next Generation's assumption that, in the absence of clear legislative authority, the regulation-making power conferred by s 323 of the POEO Act does not authorise the making of a regulation that is "inconsistent" with an existing statutory provision.
Thus, in De L v Director-General Department of Community Services (NSW) (1997) 190 CLR 207; [1997] HCA 14 ("De L"), the Director-General of the Department of Community Services applied to vacate an adverse costs order made in earlier proceedings in the High Court (De L v Director-General, Department of Community Services (NSW) (1996) 187 CLR 640; [1996] HCA 5). Section 111B(1) of the Family Law Act 1975 (Cth) relevantly provided that the regulations may make such provision as is necessary or convenient to enable the performance of Australia's obligations, or to obtain for Australia any advantage or benefit, under an international Convention. Regulation 7 made under this power purported to preclude the High Court from making an adverse costs order against the Director-General. However, s 26 of the Judiciary Act 1903 (Cth) conferred on the High Court jurisdiction to award costs in all matters brought before the Court (including matters dismissed for want of jurisdiction).
In De L, Brennan CJ and Dawson J held that, in so far as reg 7 purported to confine the discretion conferred by s 26 of the Judiciary Act to preclude the making of a costs order against a State Central Authority, it was inconsistent with s 26. Their Honours addressed this inconsistency by reading down the regulation-making power in s11B(1) of the Family Law Act as follows (at 212):
"Assuming that it would be constitutionally possible for the Parliament to authorise the making of a regulation that would amend or repeal a provision of an earlier Act of the Parliament, it would require express words to convey an intention that a general power to make regulations for a stated purpose authorised the repository to repeal or amend the Parliament's own enactments. Section 111B(1) does not purport to authorise the making of a regulation having such an effect. We would construe s 111B(1) as conferring a power to make regulations which are not inconsistent with any Act of the Parliament in force at the time when the regulations are made. Acts enacted subsequent to the making of the regulations and inconsistent with them would repeal them to the extent of the inconsistency." (emphasis added; citations omitted)
[15]
Resolution
As noted, both parties accepted the primary judge's conclusion that, on the state of affairs existing at the time of the primary judgment, reg 145 was inconsistent with s 4.42(1)(e) of the EPA Act, which concerned licences under Ch 3 of the POEO Act in relation to State significant development, and that the latter prevails over the former. Further, there is no basis for construing the regulation-making power to authorise the making of a regulation that is inconsistent with the provisions of another Act. To the contrary, and consistent with the approach of Brennan CJ and Dawson J in De L (see [77]), s 323(1) (and s 323(2)) of the POEO Act should be construed so that the regulation-making power does not extend to the making of regulations which are inconsistent with "any Act of the Parliament in force at the time when the regulations are made".
These conclusions potentially engage s 32(2) of the Interpretation Act. To construe reg 145 so that it does not purport to limit s 4.42 of the EPA Act would be an instance of reading down "general words or expressions" in reg 145 so that it is not applicable to inconsistent provisions of other legislation. However, this is not an instance where the regulation "was intended to operate fully and completely according to its terms, or not at all" (Pidoto at 108). Instead, this is a case where a reason "based upon the law itself can be stated for selecting" that limitation (Pidoto at 111), namely s 7(2) of the POEO Act, which implicitly accepts that a regulation made under the POEO Act does not limit the provisions of other statutes (although it is does prevail over subordinate instruments made under such statutes).
Even though I reject Next Generation's contention that reg 145 is partly invalid, the practical result is the same in terms of its (lack of) effect on s 4.42 (and s 5.24) of the EPA Act. Subject to considering various discretionary matters, it would be appropriate to make a declaration that reg 145 does not operate to preclude the granting of an environment protection licence under Ch 3 of the POEO Act in the circumstances provided for in s 4.42(1) of the EPA Act.
However, the State contended that no such declaration should be made because of the inclusion of Div 28 in the State Environmental Planning Policy (Transport and Infrastructure) 2021 as set out above (at [33]). It contended that "any practical possibility of a conflict between the [EPA] Act and the [Thermal Energy from Waste] Regulation is removed in respect of developments in the Greater Sydney area, including in respect of the appellant's proposal."
[16]
Proposed Orders
I propose the following orders:
(1) The appeal be dismissed;
(2) The appellant pay the respondent's costs of the appeal.
[17]
Endnotes
Next Gen at [35].
Next Gen at [73].
Next Gen at [74].
Next Gen at [75]−[76].
Next Gen at [80].
Next Gen at [35]−[36] and [77].
Next Gen at [39] and [78].
Next Gen at [40] and [79].
Section 164 of the Excise Act 1901-1949 provided: "The Governor-General may make regulations not inconsistent with this Act prescribing all matters which by this Act are required or permitted to be prescribed or as may be necessary or convenient to be prescribed for giving effect to this Act or for the conduct of any business relating to the Excise".
Appellants' Outline of Submissions in Reply at [10].
Tr 06/03/2023 p 12.
Appellant subs in reply at [10].
Applicant's subs at [20].
Tr 06/03/2023 p 2.20; p 30.25.
Next Gen at [80].
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: 12 July 2023
otection of the Environment Operations Act 1997 (NSW)
State Environmental Planning Policy (Transport and Infrastructure) Amendment (Thermal Energy from Waste) 2022 (NSW)
State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW)
Cases Cited: Co-operative Brick Co Pty Ltd v City of Hawthorn (1909) 9 CLR 301; [1909] HCA 56
Country Road Board v Neale Ads Pty Ltd (1930) 43 CLR 126; [1930] HCA 5
Criminale v State Authorities Superannuation Board [1989] HCA 48; (1989) 63 ALJR 665
De Le v Director-General, Department of Community Services (NSW) (1990) CLR 207; [1997] HCA 14
De L v Director-General, Department of Community Services (NSW) (1996) 187 CLR 640; [1996] HCA 5
Falcon v Famous Players Film Co Ltd [1926] 2 KB 474
Hamzy v Commissioner of Corrective Services (NSW) (2022) 107 NSWLR 544; [2022] NSWCA 16
Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402; [1951] HCA 42
Paull v Munday (1976) 50 ALJR 551
Pidoto v Victoria (1943) 68 CLR 87; [1943] HCA 37
Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1; [2012] HCA 46
Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; [2012] HCA 16
Shanahan v Scott (1957) 96 CLR 245; [1957] HCA 4
South Australia v Tanner (1989) 166 CLR 161; [1989] HCA 3
Stevens v Perrett (1935) 53 CLR 449; [1935] HCA 52
The Next Generation (NSW) Pty Ltd v State of New South Wales [2022] NSWLEC 138
Thomson v Workcover Authority (NSW) [2004] NSWSC 282
Category: Principal judgment
Parties: The Next Generation (NSW) Pty Ltd (Appellant)
State of New South Wales (Respondent)
Representation: Counsel:
Dr K Stern SC; Mr D Hume (Appellant)
Mr R Lancaster SC; Ms R Mansted (Respondent)
Solicitors:
Mills Oakley (Appellant)
Crown Solicitor's Office (Respondent)
File Number(s): 2022/383325
Decision under appeal Court or tribunal: Land and Environment Court
Jurisdiction: Class 4
Citation: [2022] NSWLEC 138
Date of Decision: 24 November 2022
Before: Preston CJ
File Number(s): 2022/233474
So far as cl 5 of Sch 2 is concerned, the definition of "waste" has already been noted (at [15]). The Dictionary to the POEO Act defines "waste facility" as meaning "any premises used for the storage, treatment, processing, sorting or disposal of waste (except as specified in the regulations)".
Next Generation's contention that reg 143 (and reg 145) are invalid rests principally on the contention that it is inconsistent with Ch 3 of the POEO Act which concerns environment protection licences. Within Ch 3 of the POEO Act, s 43 specifies the purposes for which an environment protection licence may be issued, including "(b) to authorise the carrying out of scheduled activities at any premises, as required under section 48" (emphasis added).
Section 48 of the POEO Act provides:
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. (emphasis added)
Part 3.3 of the Ch 3 of the POEO Act deals with the issue, transfer and variation of environment protection licences. Within Pt 3.3, s 55 provides:
55 Grant or refusal of application
(1) The appropriate regulatory authority may -
(a) in relation to an application for the issue of a licence -
(i) grant the application by issuing the licence, or
(ii) refuse the application, and
(b) …
(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.
(3) …
The prohibition in s 48(2) operates in respect of a person "who is an occupier of premises". Any licence granted under s 55 must specify the premises to which it applies (s 56(1)). As noted by the primary judge, [1] there is no restriction in the POEO Act as to the premises at which the activity may be authorised to be carried out. Within Pt 3.4 of the POEO Act, s 63 enables the granting of conditional and unconditional licences. Section 64(1) provides that it is an offence to breach a licence condition. Section 63(2) specifies that a condition cannot be attached to a licence "if compliance with the condition would result in a breach of a requirement made by or under the Act", which extends to a regulation (emphasis added). To similar effect, s 63(3) provides that if a holder of a licence "cannot meet any requirement made by or under [the POEO Act] without contravening a condition of the licence, the holder is, by meeting the requirement, taken to comply with that condition" (emphasis added). Thus, these provisions appear to contemplate that regulations made under the POEO Act may apply to a licence holder and address the same topic as licence conditions.
Part 3.5 makes provision for particular licence conditions. In particular, s 75(1) enables the imposition of conditions concerning "the creation, collection, storage, handling, transportation, treatment, processing, recovery, recycling, re-use or disposal of waste"; i.e. many of the same topics referred to in cl 5(6) of Sch 2. Section 75(6) enables the imposition of conditions on licences concerning the transport of waste (being many of the same topics referred to in cl 5(2) of Sch 2). Section 76 enables the imposition of conditions that impose post-closure requirements for waste facilities or other licensed premises. At least so far as waste facilities are concerned, that topic appears to fall within so much of cl 5(1) of Sch 2 that refers to the "operation of waste facilities".
Section 43(b) and s 48 are engaged in respect of "scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on". Section 5(1) of the POEO Act specifies that the activities listed in Sch 1 are the "scheduled activities". Section 5(3) of the POEO Act provides that the regulations "may amend or replace Schedule 1".
Part 1 of Sch 1 to the POEO Act specifies various premises-based activities upon which, inter alia, the prohibition in s 48(1) operates. Within Pt 1 of Sch 1, cl 18 specifies one form of such activity as "energy recovery", specifically "energy recovery from general waste" and "energy recovery from hazardous and other waste". Clause 40 specifies "thermal treatment of general waste" and "thermal treatment of hazardous and waste" as another form of activity. The definitions of "thermal waste" and "waste" have already been noted ( at [15]). Similarly, cll 41 and 42 specify "waste processing" (being the "non-thermal treatment" of various forms of wastes) and "waste storage" respectively as other forms of activity. Each of these clauses specify various exceptions to these activities, and in some cases provide that they are only a scheduled activity in certain circumstances or under certain conditions (see POEO Act, s 5(3)).
A number of the premises-based activities listed in Sch 1 appear to fall within the various matters the regulations may make provision for or with respect to as set out in cl 5 of Sch 2, including the "storage, processing… [and] disposal of any waste" (cl 5(6) of Sch 2). Thus, on its face, s 323 and Sch 2 of the POEO Act appear to specifically contemplate the "prohibit[ion] or regulat[ion]" of various Sch 1 premises-based activities that can be the subject of a licence granted under s 55 of the POEO Act.
Fourth, the primary judge rejected the contention that the Thermal Energy from Waste Regulation was inconsistent with the POEO Act because it created an offence for a contravention of reg 143 (being s 48(1)). His Honour concluded that the regulation-making power extended to creating an offence for a breach of a prohibition made by a regulation. [7] No argument to this effect was made on appeal.
Fifth, the primary judge rejected the contention that the Thermal Energy from Waste Regulation was invalid because regs 143(2), 144(1), 144(3) and 145 referred to activity or work prohibited by reg 143(1) and did not accommodate the exceptions to that prohibition in regs 144(1), (3) and (4). His Honour found that the reference to prohibited activity was work or activity prohibited by reg 143 that did not fall within any of the exceptions to the prohibition in reg 144. [8] Again, no argument to this effect was made on appeal.
Section 164 of the Excise Act 1901-1949, which was discussed in Morton, was not relevantly different to s 323 of the POEO Act. [9] In Plaintiff M47, Gummow J observed that the reference to "intention" in the above passage "is to be understood to pose the question whether upon its true construction the statute deals completely and thus exclusively with the subject matter of the regulation in question with the consequence that the regulation detracts from or impairs that operation of the statute" (at [134]).
The focus of the debate between the parties concerning the validity of reg 143 (and in turn the Thermal Energy from Waste Regulation as a whole) concerned the extent to which it could be ascertained that the POEO Act discloses an intention that the activities the subject of a licence under Ch 3 are to be exclusively regulated by those licences and the conditions attached thereto. At this point, it suffices to note that in considering whether there is such a legislative intention, all the provisions of the POEO Act are to be considered, including those dealing with the regulation-making power itself.
Regulation 143(1) effects a (qualified) prohibition or otherwise a form of regulation on the "thermal treatment of waste". Given the definition of "thermal treatment of waste", it follows that reg 143 effects a prohibition or regulation of a particular type of "processing… of… waste" as referred to in cl 5(6) of Sch 2 of the POEO Act. Moreover, reg 143(2) (which prohibits the carrying out of work at a premises that purports to enable an activity prohibited by reg 143(1) to be carried out) is a regulation "with respect to" the prohibition of (a form of) "processing… of… waste" as referred to in cl 5(6) of Sch 2 (POEO Act, s 323(2)). A power to make regulations "with respect to" a particular subject matter is wider than a power to make regulations "for" that subject matter (Paull v Munday (1976) 50 ALJR 551, 554−555 per Gibbs J, at 558 per Murphy J; see also Thomson v Workcover Authority (NSW) [2004] NSWSC 282 at [46]).
As noted, Next Generation submitted that reg 143 is directed to affecting a form of prohibition on the conduct of "waste facilities" and is not authorised by cl 5(6) of Sch 2 of the POEO Act which concerns, inter alia, the storage of waste other than at waste facilities. However, reg 143(1) prohibits the application of a particular process to treating "waste". On its face, reg 143(1) is not limited in its operation to "waste facilities", although the nature of "thermal treatment of waste" may be such that it can only be carried out at a location that meets the definition of a "waste facility" (see [21]). However, even if that is so, that only serves to demonstrate why cll 5(1) and 5(6) of Sch 2 do not limit each other. The activities that may be prohibited or regulated by cl 5(6) are the "storage, processing, recovery, recycling, re-use or disposal of any waste". If premises are used for any of the "storage", "processing" or "disposal" of waste, then they will constitute a "waste facility" (see [21]). Further, it seems likely that "recovery", "recycling" and "reuse" of waste as referred to in cl 5(6) would constitute the "treatment" or "sorting" of waste as referred to in the definition of "waste facility" (at [21] above). Again, if premises are used for any of those activities, then they will also constitute a "waste facility".
It follows that if Next Generation's construction of cll 5(1) and (6) is correct, then the power to make a regulation as authorised by cl 5(6) in relation to the "storage" of waste would be limited to prohibiting or regulating the inherently unlikely, or least extremely narrow, topic of the mobile "storage" of waste or the incidental "storage" of waste at premises not "used" for such a purpose. The same reasoning would apply to the other activities listed in cl 5(6). Such a construction would rob cl 5(6) of any substantive content. I reject it.
It follows that reg 143 is a regulation "with respect to any matter" that the POEO Act permits to be prescribed, specifically the matters set out in cl 5(6) of Sch 2 of POEO Act. That conclusion renders it unnecessary to consider whether reg 143 is also supported by cl 5(1) of Sch 2. However, that clause has significance to the balance of Next Generation's submissions in that the phrase "(whether or not they are required to be licensed under [the POEO Act])" is indicative of the scope of the regulation-making power in relation to "waste". As noted by the State, cl 5(1) of Sch 2 is an indication that the regulation-making power conferred by the POEO Act expressly envisages the regulation of activities which are already (or also) the subject of the licensing regime in Ch 3.
The balance of the provisions of the POEO Act, including the scope of the regulation-making power, confirm that reg 143 is not inconsistent with the scheme for granting licences under Ch 3, even though it might prohibit an activity the subject of such a licence. The POEO Act expressly contemplates restrictions being imposed on such activities by regulations even if they are the subject of such a licence. Thus, as already noted, s 63(3) expressly contemplates that regulations may impose greater restrictions on the conduct of such activities than those imposed by the conditions of a licence, with the former prevailing over the latter (see [25]).
Similarly, ss 323(5) and (5A) of the POEO Act contemplate regulations addressing the same topic as the conditions of a licence, with the regulations prevailing to the extent of any inconsistency save for where the condition imposes "a more stringent requirement than the regulation". Further, s 323(2) and cll 5(1), 5(4) and 8(4) of Sch 2 specifically contemplate the regulations imposing conditions on licences granted under Ch 3. These provisions are inconsistent with any suggestion that the POEO Act contemplates the regulation of Sch 1 activities by either the granting of a licence and imposition of conditions under Chap 3 of the POEO Act or by the making of a regulation. Instead, the POEO Act envisages the (potential) regulation of such activities by either or both of those methods, with a regulation prevailing over a condition (save for where the condition imposes a more stringent requirement).
Critically, the POEO Act expressly contemplates that the regulations may prohibit what a licence under Ch 3 "authorises". As noted, cl 5(6) of Sch 2 expressly contemplates the making of a regulation that prohibits the "storage, processing, recovery, recycling, re-use or disposal of any waste". I have already concluded that cl 5(6) is not restricted to the topic of waste other than at waste facilities, but even if it was, it would not matter. A number of the premises-based activities listed in Sch 1 clearly fall within the activities listed in cl 5(6), including waste disposal by thermal treatment (cl 40), waste disposal by non-thermal treatment (cl 41) and waste storage (cl 42). If Next Generation's argument is correct, then, as Ch 3 enables the granting of an environment protection licence to undertake those activities, it means that a regulation made under s 323 could never prohibit those forms of waste disposal and waste storage despite cl 5(6) of Sch 2 expressly contemplating that a regulation could be made to that effect.
If the rejoinder to this reasoning is that somehow the scope of the regulation-making power in respect of the matters in cl 5 of Sch 2 is to be construed so that it excludes the premises-based activities listed in Sch 1, then it overlooks the fact that the same result could be achieved by amending Sch 1 of the POEO Act by way of a regulation made under s 5(3) of the POEO Act to exclude the activity sought to be prohibited.
It follows that I reject Next Generation's argument that reg 143 is inconsistent with the "authority" given by the granting of a licence under Ch 3 of the POEO Act.
Next Generation also made arguments by reference to the various formulations in the above cases of the circumstances in which regulations are inconsistent with their enabling legislation. Hence, it was submitted that the Thermal Energy from Waste Regulation "add[s] a new and different means of carrying out the purposes of the [POEO] Act", specifically the purpose of regulating the conduct of "authorised controlled activities", by attaching conditions to environment protection licences. However, as I have explained, the POEO Act expressly contemplates that one of the means of regulating, and to some extent prohibiting, Sch 1 activities is by regulations made under s 323. Thus, reg 143 does not involve a "new and different means" of regulation. To similar effect, Next Generation submitted that the Thermal Energy from Waste Regulation involved an attempt to "widen the purposes of the [POEO] Act". This contention is premised on a misconception of the Act's purposes as only regulating scheduled activities by the granting of licences under Ch 3 and the attaching of conditions to those licences.
In De L, Toohey, Gaudron, McHugh, Gummow and Kirby JJ construed reg 7 so that it was not applicable to the circumstances in which the High Court had previously made the costs order against the Director-General and thus held that no inconsistency with s 26 of the Judiciary Act arose (at 222).
The approach of Brennan CJ and Dawson J is in accord with the statement in Criminale v State Authorities Superannuation Board [1989] HCA 48; (1989) 63 ALJR 665 at 668 that "Parliament may provide that the operation of an Act shall be modified on the occasion of the exercise by the Executive government of a power conferred upon it, but such a provision must be found expressed or necessarily implied in statute." It is also consistent with the approach adopted in Stevens v Perrett (1935) 53 CLR 449; [1935] HCA 52 where their Honours concluded that the power to make a by-law under the Local Authorities Acts 1902 (Qld) dealing with traffic was limited so that it could not be exercised to make a regulation of the kind that had been made under cl 13 of the Main Roads Act 1920 (Qld) (at 462).
A finding that a regulation that is inconsistent with an Act other than its empowering Act is invalid raises the potential for the application of s 32 of the Interpretation Act, which provides:
32 Instruments to be construed so as not to exceed the powers conferred by the Acts under which they are made
(1) An instrument shall be construed as operating to the full extent of, but so as not to exceed, the power conferred by the Act under which it is made.
(2) If any provision of an instrument, or the application of any such provision to any person, subject-matter or circumstance, would, but for this section, be construed as being in excess of the power conferred by the Act under which it is made -
(a) it shall be a valid provision to the extent to which it is not in excess of that power, and
(b) the remainder of the instrument, and the application of the provision to other persons, subject-matters or circumstances, shall not be affected.
(3) This section applies to an instrument in addition to, and without limiting the effect of, any provision of the instrument or of the Act under which it is made.
In Hamzy v Commissioner of Corrective Services (NSW) (2022) 107 NSWLR 544; [2022] NSWCA 16 at [187], Leeming JA noted that subs (1) embodies a principle that instruments should be construed so they do not exceed the regulation-making power and subs (2) embodies an approach to reading down an otherwise invalid instrument which is wider than the approach at common law.
During oral submissions, Senior Counsel for Next Generation referred to the limitations on the application of the equivalent provision to s 32 of the Interpretation Act found in s 46(2) of the Acts Interpretation Act 1901 (Cth) as discussed in Pidoto v Victoria (1943) 68 CLR 87; [1943] HCA 37 ("Pidoto") (and numerous other cases). In that case, it was held that s 46(2) does not preserve the operation of an instrument so that it validly applies "in all cases to which [it is], according to [its] terms, applicable, irrespective of failure to operate in other cases" (Pidoto at 108). Instead, s 46(2) can operate to read down an instrument where "good and bad provisions are contained in separate words and expressions… provided that the operation of the remaining parts of the law remains unchanged" and also to limit "general words or expressions" in an instrument provided that "the law was [not] intended to operate fully and completely according to its terms, or not at all… [such that] the law would be either completely valid, or completely invalid" (ibid). However, "general words or expressions" can only be read down "if [there is] an intention of Parliament that there should be a partial operation of the law based upon some particular standard criterion or test [that] can be discovered from the terms of the law itself or from the nature of the subject matter with which the law deals" (Pidoto at 111). If "no reason based upon the law itself can be stated for selecting one limitation rather than another, the law should be held to be invalid" (ibid).
According to the State, Div 28 ensures that development involving any activity that is prohibited by reg 143 is "prohibited" and thus not capable of being granted consent under the EPA Act (s 4.38(2)). Presumably, it is said to follow that there is no possibility that such a development could be "authorised by a development consent" for the purposes of s 4.42(1) of the EPA Act, and thus s 4.42(1)(e) could never be engaged in respect of activity that might be prohibited by reg 143. On this view, it follows that there is no circumstance in which there could be conflict between reg 145 and s 4.42(1) of the EPA Act. Next Generation responded to this by contending that Div 28 is not engaged because the invalidity of reg 143 means that the development they propose is not prohibited by the Thermal Energy from Waste Regulation as specified in cl 2.171(1)(c) of Div 28. As I do not accept that reg 143 is invalid, that contention falls away.
The proper construction of Div 28 and its application to Next Generation's development consent application arises in an unusual context. Division 28 came into force after the primary judgment. In circumstances where the construction and application of Div 28 to Next Generation's development application was not in issue before the primary judge, but can reasonably be expected to be in issue in the Class 1 proceedings on foot between Next Generation and other parties challenging the refusal of its development application by the relevant consent authority (see [9] above), it is not appropriate for this Court to resolve how Div 28 applies to Next Generation's proposed development. The Land and Environment Court is the appropriate forum for the determination of such matters relating to environmental planning instruments. Moreover, in Class 1 proceedings, there is a right of appeal to the Supreme Court on a question of law: Land and Environment Act 1979 (NSW), s 57. Further, it is also not appropriate to make a declaration as Next Generation seeks concerning the validity of reg 145 as promulgated, when the amendment to SEPP (Transport and Infrastructure) 2021 to include Div 28 brings about a state of affairs which undermines the utility attaching to the making of such a declaration in advance of the determination of Next Generation's Class 1 proceedings. In addition, I am reluctant to make a declaration which might be incorrectly capable of application to materially different circumstances than those the subject of these proceedings.
The position is made more complex in circumstances where Next Generation expressly declined to pursue a stand-alone argument that reg 145 exceeds the regulation-making power conferred by the POEO Act even if it is found that reg 143 is valid. A declaration reflecting an inconsistency between regulation 145 and s 4.42 of the EPA Act might be taken as an acceptance that reg 145 is otherwise authorised by s 332 of the POEO Act when the Court has not been asked to determine that question. If another court needs to consider the interrelationship between reg 145 and s 4.42 of the EPA Act, it will have the benefit of this Court's construction of reg 145 set out above.
Accordingly, I do not propose that this Court make a declaration to reflect the construction of reg 145 noted above at [84]−[85].
I would reject ground 1(b) of the appeal and the corresponding part of ground 2.
HEADNOTE
[This headnote is not to be read as part of the judgment]
In April 2015, the appellant, The Next Generation (NSW) Pty Ltd (Next Generation), lodged a "State significant development" application under the Environmental Planning and Assessment Act 1979 (NSW) (the "EPA Act") seeking development consent for the construction and operation of an energy from waste facility in Honeycomb Drive, Eastern Creek. The Independent Planning Commission (the "IPC") refused the application in July 2018.
On 14 January 2019, Next Generation filed "Class 1 proceedings" in the Land and Environment Court appealing the IPC's refusal of its application. On 8 August 2022, Next Generation commenced separate "Class 4 proceedings" in the Land and Environment Court challenging the validity of Pt 4 of Ch 9 of the Protection of the Environment Operations (General) Regulation 2022 (NSW) (the "Thermal Energy from Waste Regulation") on the ground that it is beyond the regulation-making power conferred by s 323 of the Protection of the Environment Operations Act 1997 (NSW) (the "POEO Act"). The respondents to the Class 1 proceedings contend that the Thermal Energy from Waste Regulation precluded the grant of the development consent sought.
On 24 November 2022, the primary judge dismissed the class 4 proceedings.
Regulation 143 prohibits "the thermal treatment of waste" that "involves or results in energy recovery from the waste" and where one or more of the activities carried out at the premises carries are "scheduled activities" under Sch 1 of the POEO Act that require a licence. Regulation 145 states that an application for the "issue, transfer or variation of a licence" must be refused "if granting the application would purport to authorise an activity or work prohibited by this Part". Clause 50(1) of Sch 1 of the POEO Act relevantly defines "thermal treatment" to mean "the processing of wastes by burning, incineration, thermal oxidation… or other thermal treatment processes" (emphasis added). The Dictionary to the POEO Act relevantly defines "waste" to include "any discarded, rejected, unwanted, surplus or abandoned substance" and "any substance prescribed by the regulations to be waste". It also defines "waste facility" to mean "any premises used for the storage, treatment, processing, sorting or disposal of waste (except as specified in the regulations)".
Section 323(1) of the POEO Act confers a power to make regulations that are "not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed… for carrying out or giving effect to this Act" (the regulation-making power). Section 323(2) states that "the regulations may make provision for or with respect to the matters set out in Schedule 2". These matters relevantly include "[p]rohibiting or regulating the storage, processing, recovery, recycling, re-use or disposal of any waste" (cl 5(6) of Sch 2).
Section 4.42(1) of Environment Planning and Assessment Act 1979 (NSW) (the "EPA Act") precludes, inter alia, the refusal of an environment protection licence under Ch 3 of the POEO Act "if it is necessary for carrying out State significant development that is authorised by a development consent and [are] to be substantially consistent with the consent". Section 5.24 of the EPA Act makes similar provision in relation to "State significant infrastructure".
On 16 December 2022, the State Environmental Planning Policy (Transport and Infrastructure) Amendment (Thermal Energy from Waste) 2022 (NSW) was made. This amendment inserted Div 28 into Pt 2.3 of the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW), which includes a prohibition on development involving "the thermal treatment of waste… or resulting in energy recovery from the waste" (cl 2.171(1)). The respondent contended that the effect of Div 28 was to remove the potential for any overlap between the operation of reg 145 and s 4.42(1) of the EPA Act.
The principal issues on appeal were:
whether the Thermal Energy from Waste Regulation, especially reg 143, is with respect to any matter permitted or to be prescribed for carrying out the POEA Act or is otherwise inconsistent with the POEO Act and therefore invalid (the Reg 143 invalidity issue);
whether reg 45 of the Thermal Energy from Waste Regulation is inconsistent with the EPA Act and therefore invalid (the EPA Act inconsistency issue); and
whether declaratory relief should be granted concerning the scope of operation of reg 145 and s 4.42(1) of the EPA Act (the declaratory relief issue).
The Court held (per Beech-Jones JA, Meagher JA and Gleeson JA agreeing), dismissing the appeal:
As to the Reg 143 invalidity issue
The scope of the regulation-making power must be considered in light of the approach taken by the relevant statute in regulating the subject matter with which it deals. The definitions of "thermal treatment" and "waste" mean that the "thermal treatment of waste" (as referred to in reg 143(1)) is a form of "processing… of… waste" (as referred to in cl 5(6) of Sch 2 to the POEO Act). Given the definition of "thermal treatment of waste", it follows that reg 143 is a regulation "with respect to" the prohibition of (a form of) "processing… of… waste" as referred to in clause 5(6) of Sch 1 and thus is a regulation "with respect to any matter" the POEO Act permits to be prescribed for the purposes of s 323(1) and (2): per Beech-Jones JA at [46], [51]−[55]; Meagher JA agreeing at [1]; Gleeson JA agreeing at [2].
The provisions of the POEO Act, including the scope of the regulation-making power, confirm that reg 143 is not inconsistent with the licensing scheme under Ch 3 of the POEO Act. The "authority" conferred by a licence under s 43(b) of the POEO Act is only a lawful excuse to do what s 48 otherwise prohibits. The POEO Act expressly contemplates that the regulations may prohibit what a licence under Ch 3 of the POEO Act "authorises": per Beech-Jones JA at [62]−[65]; Meagher JA agreeing at [1]; Gleeson JA agreeing at [2].
Shanahan v Scott (1957) 96 CLR 245; [1957] HCA 4; Morton v Union Steamship Co of New Zealand Ltd (1951) 83 CLR 402; [1951] HCA 42, considered. Plaintiff M47/2012 v Director-General of Security (2012) 251 CLR 1; [2012] HCA 46; Country Road Board v Neale Ads Pty Ltd (1930) 43 CLR 124; [1930] HCA 5; Paull v Munday (1976) 50 ALJR 551, cited.
As to the EPA inconsistency issue
Sections 323(1)−(2) of the POEO Act should be construed so that the regulation-making power does not extend to making regulations which are inconsistent with "any [other] Act of the Parliament in force at the time when the regulations are made". By operation of s 32 of the Interpretation Act 1987 (NSW), reg 145 can be read down so that its operation is not inconsistent with the provisions of legislation other than the POEO Act, such as s 4.42(1) of the EPA Act: per Beech-Jones JA at [83]−[84]; Meagher JA agreeing at [1]; Gleeson JA agreeing at [2].
De Le v Director-General Department of Community Services (NSW) (1997) 190 CLR 207; [1997] HCA 14, applied. Pidoto v Victoria (1943) 68 CLR 87; [1943] HCA 37; Criminale v State Authorities Superannuation Board [1989] HCA 48; (1989) 63 ALJR 665; Stevens v Perrett (1935) 53 CLR 449; [1935] HCA 52; Hamzy v Commissioner of Corrective Services (NSW) (2022) 107 NSWLR 544; [2022] NSWCA 16, considered.
As to the Declaratory Relief Issue
The grant of declaratory relief as to the operation of reg 145 is not appropriate in circumstances where the proper construction and effect of Div 28 of the State Environmental Planning Policy (Transport and Infrastructure) 2021 (NSW), which came into force after the primary judgment, can reasonably be expected to be an issue in the Class 1 proceedings on foot between Next Generation and other parties. The grant of declaratory relief concerning the scope of reg 145 and its interaction with s 4.42(1) of the EPA Act is also not appropriate where Next Generation expressly declined to challenge the validity of reg 145 as not authorised by s 323 of the POEO Act independently of its challenge to reg 143: per Beech-Jones JA at [88]−[90]; Meagher JA agreeing at [1]; Gleeson JA agreeing at [2].