Truegain Pty Limited v NSW Environment Protection Authority [2008] NSWLEC 278 | Case summary

JUDGMENT Introduction 1 His Honour: The NSW Environment Protection Authority (now part of the Department of Environment and Climate Change) has given Truegain Pty Limited formal notice of the suspension of its environmental protection licence, with effect from 30 September, and Truegain has appealed to this Court. 2 Section 287 of the Protection of the Environment Operations Act 1997 ("POEO Act") makes clear that the lodging of an appeal does not stay the suspension but the court can do so on the licensee's application. By Notice of Motion Truegain has sought a stay, and this judgment deals with that application. 3 Pending delivery of this judgment on 1 October I granted on 29 September a stay from 30 September to 2 October. 4 I have decided to grant both the company's application for the stay to be extended until further order of the court, and its application for its appeal to be expedited, and my reasons follow. Brief background 5 The company has been operating from its current location at 62 Kyle Street, Rutherford (near Maitland) for approximately 12 years, and several other businesses in nearby locations also hold environment protection licences. Truegain recycles used petroleum products by refining used oils, and its licence under the POEO Act authorises scheduled activities described as "Petroleum Works" and "Waste Facilities - HIGAB processing". The plant employs 55 people and operates 24 hours a day, seven days a week. 6 The EPA's notice of suspension details the environmentally harmful consequences of non-compliance with the terms of the licence, and sets out five reasons for its suspension. 7 The most relevant officer of the company, its director Paul Lucas, has been in charge of the relevant plant on site for twelve years and has also retained a specialist environmental consultant (MJM Environmental Pty Ltd) to advise him on the issues raised by the EPA. 8 In his affidavit of 26 September Mr Lucas sets out his company's responses, in reliance on the advice of its consultant, to each of the matters put against it in the notice of suspension. The full technical details need not be repeated here, but there is clearly a serious dispute between the parties about the grounds relied on by the EPA for seeking to suspend the company's licence. The EPA raised no objection to the reading of Mr Lucas's affidavit. While it contested some matters of detail in his sworn evidence, it led no evidence in response to it at this stage of the proceedings. 9 Licence holders have a serious responsibility to (1) carry out scheduled activities with due regard to the possibility of harm to the environment, and (2) properly maintain, operate and keep in efficient condition all their pollution control equipment. 10 The court recognises the right of citizens to complain of environmental impact such as odour, and the duty of the EPA to investigate complaints of odour emanating from the Rutherford industrial estate. The court also recognises the EPA's difficulty in conclusively identifying, among possible culprits in or near the estate, the precise source of that odour. The local complaints describe the so-called "West Maitland stink" as having an "oily" smell. 11 A notice of intention was served on Truegain on 21 July, and MJM responded to the EPA/DECC in detail on 31 July on its behalf. The company then attended a meeting with the EPA on 9 September and the suspension notice (bearing that date) was issued shortly after that meeting. 12 A press statement was also issued following the meeting on 9 September. A senior officer of DECC/EPA conceded, in that statement, that "there was no definitive proof that the deficiencies with the odour control systems [found to be inefficient] were the cause of all the odours reported by residents in Rutherford but DECC was confident it had been a contributing source". 13 On 19 September MJM responded on Truegain's behalf, in detail, to the contents of the notice. That letter of 19 September reported on the company's continued efforts to ensure full compliance (e.g. adjustments made on 31 July to an important transmitter, and installation of a large booster fan on 30 August). Having received no further response, the company launched this appeal and put on its notice of motion. 14 Ultimately the court will have to weigh up competing expert testimony. The company's evidence (as presented to DECC in the letter of 19 September) asserts that relevant readings were "below the DECC's accepted impact assessment criteria" and indicated no "risk to human health or the environment". On the other hand, the EPA advisors simply do not accept that the identified problems with the company's operations are adequately assessed and addressed in the company's expert reports, abstracted in Mr Lucas's affidavit. 15 The company claims that its observance of the conditions of suspension will clearly close the operation down totally. It remains firm in its assertion that it is not in breach of the conditions of its licence. If it is forced to cease operations it will have to stand down all 55 staff without pay, and will incur severe financial difficulties in servicing its debts/loans. If it is allowed to resume operations it will take 9-10 hours to restart the plant. 16 The company also asserts that its suppliers of waste oil will have to find other outlets to take that waste while ever the Truegain plant is closed, thus threatening the company's future operations if and when it is allowed to reopen. Consideration 17 The EPA does not consent to the requested stay, but agrees with counsel for the company that the correct principles for the court to apply in deciding the question are those I chose to apply in Zouki & (2) Ors v Water Administration Ministerial Corporation [2001] NSWLEC 61 ("Zouki"), when I adapted on a stay application the principles on interlocutory injunctive relief laid down by Castlemaine Tooheys Limited and Others v The State of South Australia (1986) 161 CLR 148 (at 153): (i) is there a serious issue to be tried in the appeal? (ii) will irreparable harm flow if the stay is either granted or refused? and (iii) where does the balance of convenience lie in all the circumstances of the case? 18 In Zouki I was asked to stay orders made under provisions similar to those in the POEO Act, in circumstances where granting the stay would have amounted to a summary judgment on the pending appeal, and I declined to grant it, on the merits. 19 Bignold J was urged to apply the Zouki principles in Slack-Smith v Director-General, Department of Land and Water Conservation (2002) 124 LGERA 47, but declined to do so. The issue before His Honour was whether a direction to carry out certain remedial works under the Native Vegetation Conservation Act 1997 should be stayed. His Honour said that, while the Zouki principles could well apply where there were orders to "stop work", a better test in the case before him was to determine what was "in the interests of justice" in the statutory context under which positive or "do work" directions were given. 20 I accept the distinction His Honour drew. The circumstances in the present case are more analogous to those in Zouki than those in Slack-Smith - the notice given here requires an employer to "stop work" and close down, subject to a statutory right of appeal. A stay will not prejudge this appeal, and I am content to rely upon the Zouki principles in this case. 21 No other relevant authorities were identified to the court by either party. 22 I have already made plain my view that there are certainly serious issues to be tried in this appeal. If the Applicant's expert evidence is accepted, the Applicant may be found to have caused little or none of the environmental harm of which the local population has complained. Serious though odour allegations are, the harm caused by whatever odour Truegain alone may generate until the appeal is heard, is not irreparable, and it can be shortened in duration, in the interests of all concerned, by my granting the application for expedition. 23 On the other hand, a closure of the plant whether or not the hearing is expedited, and even if closure proves to be only temporary, will certainly harm 55 households, and may irreparably damage the company's operation. Refusing the stay would cause prejudice and harm to the company, not adequately compensated by any order for expedition. 24 In all these circumstances both the balance of convenience and the interests of justice favour the court's granting of the stay and of expedition. 25 As canvassed during argument, any proven breach of environmental laws, regulations, licence conditions or standards during the stay could well shift that balance of convenience, and result in at least a review of the stay if not its cancellation, in the interests of justice, so the company has an ongoing incentive to comply and improve. For that reason the stay will be granted "until further order", rather than "until determination of the appeal". Conclusion 26 The orders of the court will, therefore, be:

Truegain Pty Limited v NSW Environment Protection Authority

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