Weston Aluminium Pty Limited v Environment Protection Authority & Anor

Weston Aluminium Pty Limited v Environment Protection Authority & Anor - [2005] NSWLEC 698 - NSWLEC 2005 case summary — Zoe

[11]

JUDGMENT 1 Her Honour: In these Class 4 proceedings, the Applicant is challenging the variation by the First Respondent ("the EPA") of Environment Protection Licence no. 642 ("licence 642") held by the Second Respondent. The EPA (now the Department of Environment and Conservation, but hereafter referred to as the EPA) issues environment protection licences and licence variations pursuant to the Protection of the Environment Operations Act 1997 ("the POEO Act"). It has filed a submitting appearance save as to costs. 2 The Applicant's Class 4 Application seeks a declaration and consequential order in the following terms: A declaration that any Licence or Notice of Variation of Licence issued by the first respondent to the second respondent pursuant to the Protection of the Environment Operations Act 1997 (the "Act") which varied the second respondent's Environment Protection Licence No 642 in so far as they purport to licence and permit "waste storage, transfer, separating or processing", being a waste facility that allows the acceptance and use of dross from the second respondent's Point Henry facility in Victoria at the second respondent's premises described in the schedule hereto, has been issued in breach of section 50(2) of the Act and as such is void and of no effect. 3 The Second Respondent is the lessee and occupier of land at Yennora described as Lot 220 DP 703309, Lot 24 DP 606744 and Lots 6A, 7A, 8A, 9A and 10A DP 21070 ("the Yennora premises"). The Second Respondent manufactures aluminium products on the Yennora premises. Manufacturing processes include: (a) the remelting of various types of aluminium materials (including primary aluminium ingot, clean aluminium scrap material and aluminium obtained from the rotary furnace); (b) the rolling of the remelted aluminium into thicknesses appropriate for the different types of aluminium product produced (namely can stock, sheet metal and aluminium foil); (c) the processing (melting) in rotary furnace 3 ("RF3") of used beverage containers (aluminium cans), dross, pot bottoms, crucible pourings and other types of aluminium scrap to produce molten aluminium (which is then used in the melting furnace); and (d) the preparation of the rolled product into forms suitable to the intended purpose of that product. 4 From early 1974 until early 1980, dross produced on site at Yennora South was processed in rotary furnace 1 ("RF1") at Yennora South. With the commissioning of rotary furnace 2 ("RF2") and the relocation of RF1 to Yennora North during the period mid 1980 to 1981, dross produced in the remelt furnaces at Yennora South and, after their commissioning, in the remelt furnaces at Yennora North was processed in the rotary furnaces at Yennora North. Aluminium obtained from the rotary furnaces at Yennora North was and is fed into the remelt furnaces at Yennora North.

[13]

Alleged breach 7 The Applicant alleges there has been a breach of the POEO Act. On 21 September 2000 KAAL applied for a variation to licence 642 to include a new scheduled activity being "waste storage, transfer, separating or processing" and to amend licence 642 to allow the processing of dross from the Point Henry smelter operation in RF3 at Yennora North ("the application for variation"). 8 On 29 November 2001, the EPA issued a Notice of Variation which, inter alia, purported to vary licence 642 to include as a new scheduled activity "waste facility" being "waste storage, transfer, separating or processing". "Dross" was included as a waste material which could be stored and/or processed (a new "scheduled activity"). There is no reference in the licence document to where any dross is to come from. 9 In the matter of Weston Aluminium Pty Limited v Alcoa Australia Rolled Products Pty Limited [2004] NSWLEC 551 (matter no. 41622 of 2004), Lloyd J held at [40] - [41] that RF2 located in the can reclamation plant erected on land formerly comprising Lots 1, 3 and 4 of DP 533033 and Lots 6A, 7A, 8A, 9A and 10A of DP 21070 at Yennora North pursuant to development consent 80/40, could only be used for the treating, processing or reprocessing of used beverage cans and aluminium dross produced by stage one of the remelt facility erected on Lot 23 DP 606744, pursuant to the Environmental Planning and Assessment Act 1979 ("the EP&A Act") in accordance with development consent 81/254. His Honour held at [41] specifically that dross from the Second Respondent's Point Henry facility could not be processed at the Yennora premises. 10 The Applicant argued that as a result of Lloyd J's decision the processing at the Yennora premises of dross produced and imported from the Point Henry facility required development consent pursuant to the EP&A Act. As the Second Respondent has not obtained development consent for the processing of dross imported from the Point Henry facility, due to the application of s 50(2) of the POEO Act, the EPA was not able to approve the variation of licence 642 under s 58(5) of the POEO Act. The Applicant lodged development application no. 2005/0674 with Holroyd City Council on 4 March 2005 to procure development consent for the activities engaged in by the Second Respondent which are the subject of these proceedings. The development application has yet to be determined by Holroyd City Council. 11 In an interlocutory application for summary dismissal in these proceedings, Bignold J considered whether the current proceedings should be summarily dismissed as vexatious or frivolous because they raised the same issues as in Weston Aluminium Pty Limited v Alcoa Australia Rolled Products Pty Limited [2004] NSWLEC 551 (matter no. 41622 of 2004) before Lloyd J. Bignold J considered at [13] - [14] that these proceedings involved a separate issue, namely a breach of s 50(2) of the POEO Act, which was not raised in the earlier proceedings, hence the hearing before me. At [17] - [24], Bignold J considered that if the Court did find that there was a relevant breach of the POEO Act, the question of the exercise of the Court's discretion to grant a remedy pursuant to s 124 of the EP&A Act in the matter before Lloyd J, and pursuant to s 252 of the POEO Act in the present proceedings, remained. His Honour held it might be preferable for that common issue to be determined concurrently by the Court with respect to the issue of discretion.

[15]

Relevant legislation 13 Chapter 3 of the POEO Act sets out the legislative regime in relation to the issuing of environment protection licences. Section 43 of the POEO Act provides that environment protection licences may be issued to authorise the carrying out of a scheduled activity as required by s 48 and s 49 of the POEO Act. Sections 48(2) and 49(2) of the POEO Act provide that it is an offence to carry out scheduled activities (premises-based and not premises-based respectively) unless the person is the holder of a licence that authorises that activity to be carried on. The Dictionary to the POEO Act defines "scheduled activity" as those activities listed in Sch 1. Schedule 1 includes the following activities: Waste facilities (1) A waste facility that is of any one or more of the following classes: … (d) waste storage, transfer, separating or processing facilities , being waste facilities that store or transfer, or recover by way of separating or processing, more than 30,000 tonnes of waste per year, … 14 Section 50(1) of the POEO Act provides that development that cannot be carried out without development consent under the EP&A Act is called "controlled development". The parties agreed that the scheduled activity in this case, namely the "waste storage, transfer, separating or processing" and the processing of dross from the Point Henry smelter operation in Victoria in the rotary furnace at the Yennora premises requires development consent. 15 Section 50(2) states: A licence that relates to controlled development must not be granted by the appropriate regulatory authority, unless development consent has been granted for the controlled development. However, this section does not prevent the consideration of a licence application by the appropriate regulatory authority before development consent is granted. 16 Section 58 of the POEO Act provides for the variation of licences as follows: (1) The appropriate regulatory authority may vary a licence (including the conditions of a licence). (2) A variation includes the attaching of a condition to a licence (whether or not any conditions have already been attached), the substitution of a condition, the omission of a condition or the amendment of a condition. (3) A licence may be varied on application by the holder of the licence or on the initiative of the appropriate regulatory authority. (4) A licence may be varied at any time during its currency, including on its being transferred to another person. (5) A licence is varied by notice in writing given to the holder of the licence. (6) If: (a) the variation of a licence will authorise a significant increase in the environmental impact of the activity authorised or controlled by the licence, and (b) the proposed variation has not, for any reason, been the subject of environmental assessment and public consultation under the Environmental Planning and Assessment Act 1979; the appropriate regulatory authority is to invite and consider public submissions before it varies the licence. Issues 17 Two issues arose for determination in these proceedings: (1) Does s 50(2) of the POEO Act apply to the variation of licences pursuant to s 58 of the POEO Act? (2) If s 50(2) does apply to the variation of a licence under s 58, is the existence of development consent a jurisdictional fact under s 50(2) of the POEO Act?

[43]

31 Development consents are rights in rem running with the land to which they relate, while environment protection licences are issued to a "person" and may be varied unilaterally by the EPA. They are not therefore the same as development consents. Under s 77 of the POEO Act a licence made under the POEO Act is indefinite in that it continues unless suspended, revoked or surrendered. A licence also gives rise to significant legal obligations and criminal offences if breached. It is important that it be certain and readily definable from a limited range of documents. I agree that a strict approach to interpretation, such as applies to development consents, ought apply to environment protection licences. This requires the terms of the licence as varied to be considered carefully. 32 At Background (b) (extracted at par 18 above) the Notice of Variation states that the application for a licence variation is to allow the acceptance and use of dross from another KAAL premises as does the application for variation of the licence. There was no dispute between the parties that the whole of the Notice of Variation of Licence 642 is relevant, including the "Background" section. That refers to the intention of the applicant for the variation to bring dross from another place (unidentified) to the Yennora premises. This still leaves outstanding the issue of whether the application for variation of the licence ought be considered. 33 The Dictionary to the POEO Act defines "licence application" as: … an application for the issue, transfer, variation or surrender of a licence. 34 Clause A4.1 of licence 642 states: Works and activities must be carried out in accordance with the proposal contained in the licence application, except as expressly provided by a condition of this licence. In this condition the reference to "the licence application" includes a reference to: (a) the applications for any licences (including former pollution control approvals) which this licence replaces under the Protection of the Environment Operations (Savings and Transitional) Regulation 1998 and (b) the licence information form provided by the licensee to the EPA to assist the EPA in connection with the issuing of this licence.

[52]

(b) Does s 50(2) of the POEO Act apply to the variation of licences under s 58 of the POEO Act? 48 Both parties argued their respective interpretations of the POEO Act provisions in question were supported by the objects of the POEO Act contained in s 3. The relevant objects of the POEO Act state: The objects of this Act are as follows: … (b) to provide increased opportunities for public involvement and participation in environment protection, (c) to ensure that the community has access to relevant and meaningful information about pollution, … (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation, … 49 Given the broad nature of these objects there is no obvious support for either parties' arguments in the specific circumstances before me. I do not therefore find persuasive the Applicant's argument that to allow the EPA to vary a licence to approve a scheduled activity which also needs development consent before that consent is obtained is not in accordance with the Act's objectives and undermines the intent of s 50(2). I agree with the Second Respondent that if the EPA decides to issue a variation of a licence to allow a scheduled activity for which development consent under the EP&A Act is required, this does not remove the obligation on the applicant for the variation to obtain development consent if required under the EP&A Act. 50 The Second Respondent argued that s 50(2) was essentially a timing provision to ensure that when a new licence was issued under the POEO Act for a scheduled activity that is also controlled development that development consent was granted first. When the provisions of s 50 and s 58 are read as a whole I agree with that submission. There are two separate regimes provided for new licences and variation of licences. One does not apply to the other. 51 I consider that this approach is supported by s 58(6)(b) of the POEO Act which states that if the proposed variation has not, for any reason, been the subject of environmental assessment and public consultation under the EP&A Act the EPA is to invite and consider public submissions before it varies the licence. Section 58(6)(b) of the POEO Act clearly contemplates a situation where an application for a variation of a licence is considered by the appropriate regulatory authority before development consent for a scheduled activity that is controlled development has been granted. It follows that s 50(2) does not apply to the variation of licences under s 58 of the POEO Act.

At a glance

Court

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Judgment (55 paragraphs)

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Cases Cited (5)

Cited By (2)