Environment Protection Authority v Crush and Haul Pty Ltd

[2024] NSWLEC 15

Land and Environment Court

New South Wales

Medium Neutral Citation:

Environment Protection Authority v Crush and Haul Pty Ltd [2024] NSWLEC 15

Hearing dates:

11 December 2023

Date of orders:

11 March 2024

Decision date:

11 March 2024

Jurisdiction:

Class 1

Before:

Pain J

Decision:

The Court orders:

(1) Appeal no. 2023/260897 is dismissed.

(2) The Appellant is to pay the Respondent’s costs of the appeal as agreed or assessed.

Catchwords:

APPEAL – s 56A appeal from decision of acting commissioner on question of law in finding that applicant company a fit and proper person under Protection of the Environment Operations Act 1997 (NSW) – no failure to consider matter not identified to acting commissioner at hearing – no failure to consider correct statutory test – no failure to consider specific paragraphs of judgment in separate criminal case – attribution of weight to relevant factors by acting commissioner not reviewable under statutory scheme – decision not legally unreasonable – appeal dismissed

Legislation Cited:

Environmental Planning and Assessment Act 1979 (NSW)

Land and Environment Court Act 1979 (NSW), ss 38, 39, 56A

Protection of the Environment Operations Act 1997 (NSW), ss 45, 48, 55, 83, 287, Sch 1, cll 16, 19

Cases Cited:

Attorney General (NSW) v X (2000) 49 NSWLR 653; [2000] NSWCA 199

Bankstown City Council v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152

Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68

BankstownCouncil v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152

Bat Advocacy NSW Inc v Minister for Environment Protection, Heritage and the Arts (2011) 180 LGERA 99; [2011] FCAFC 59

Bonim Stanmore Pty Ltd v Marrickville Council (2007) 156 LGERA 12; [2007] NSWLEC 286

Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367

Carstens v Pittwater Council (1999) 111 LGERA 1; [1999] NSWLEC 249

Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215

Craig v South Australia (1995) 184 CLR 163; [1995] HCA 8

Crush and Haul Pty Ltd v Environment Protection Authority [2023] NSWLEC 1367

Davis v Gosford City Council [2013] NSWLEC 49

Design Power Associates Pty Ltd v Willoughby City Council (2005) 148 LGERA 233; [2005] NSWLEC 470

Dial A Dump Industries Pty Ltd v Roads and Maritime Services (2016) 216 LGERA 285; [2016] NSWLEC 39

Environment Protection Authority v Ace Demolition & Excavation Pty (No 2) [2023] NSWLEC 3

Environment Protection Authority v Crush and Haul Pty Ltd; Environment Protection Authority v Cauchi [2022] NSWLEC 113

Environment Protection Authority v M A Roche Group Pty Ltd [2014] NSWLEC 114

Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29

Friends of King Edward Park Inc v Newcastle City Council (No 2) [2015] NSWLEC 76

Georges River Council v S A F Group Pty Ltd [2021] NSWLEC 151

Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378

Hoskins v Waverley Council [1999] NSWLEC 236

Hoy v Coffs Harbour City Council [2015] NSWLEC 128

Hurstville City Council v Goreski [2011] NSWLEC 188

Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114

Jabari v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 298 FCR 431; [2023] FCAFC 98

Ku-ring-gai Council v Bunnings Properties Pty Ltd (2019) 236 LGERA 35; [2019] NSWCA 28

Liverpool City Council v Moorebank Recyclers Pty Ltd [2018] NSWCA 7

Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24; [1986] HCA 40

Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18

Minister for Immigration and Border Protection v MZYTS (2013) 230 FCR 431; [2013] FCAFC 114

Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421

Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6

Muscat Developments Pty Ltd v Wollondilly Shire Council [2023] NSWLEC 121

MZAPC v Minister for Immigration and Border Protection (2021) 390 ALR 590; [2021] HCA 17

Nathanson v Minister for Home Affairs (2022) 96 ALJR 737; [2022] HCA 26

Peacock v Repatriation Commission (2007) 161 FCR 256; [2007] FCAFC 156

Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497; [2022] HCA 17

Randwick City Council v Belle Living Pty Ltd (No 2) [2023] NSWLEC 100

Segal v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310

Stambe v Minister for Health (2019) 270 FCR 173; [2019] FCA 43

Sydney Metro v Expandamesh Pty Ltd [2023] NSWCA 200

Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391

Tanious v Georges River Council [2016] NSWLEC 142

Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195

Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9

Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) (2010) 176 LGERA 119; [2010] NSWLEC 17

Warkworth Mining Pty Ltd v Bulga Milbrodale Progress Association Inc (2014) 86 NSWLR 527; [2014] NSWCA 105

Wattie v Industrial Relations Secretary on behalf of the Secretary of the Department of Justice (No 2) [2018] NSWCA 124

Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88

Woodhouse v Comcare (2021) 285 FCR 14; [2021] FCAFC 95

Category:

Principal judgment

Parties:

Environment Protection Authority (Appellant)
Crush and Haul Pty Ltd (Respondent)

Representation:

Counsel:
B Kaplan with K Morris (Appellant)
J Lazarus SC with C Novak (Respondent)

Solicitors:
Environment Protection Authority (Appellant)
Hones Lawyers (Respondent)

File Number(s):

2023/260897

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 1

Citation:

[2023] NSWLEC 1367

Date of Decision:

19 July 2023

Before:

Targett AC

File Number(s):

2022/350294

JUDGMENT

Protection of the Environment Operations Act 1977 (NSW)

Grounds of s 56A appeal

Principles applied in s 56A appeal

Ground 4: failure to consider relevant matter

Extract of AC’s Judgment

Transcript

Exhibit 5 in Class 1 proceedings – Letters between EPA and Respondent dated June and August 2017

Email dated 16 June 2023 enclosing letters between EPA and Respondent

EPA’s submissions

Respondent’s submissions

No failure to consider relevant matter

Ground 2: failure to consider the findings in Crush and Haul (criminal)

Extracts of AC’s judgment relevant to Grounds 2 and 3

Transcript

Respondent’s Amended Statement of Facts and Contentions before the AC

EPA’s Amended Statement of Facts and Contentions in Reply before the AC

EPA’s written submissions before the AC

EPA’s submissions

Ground 2(a)

Ground 2(b)

Ground 2(c)

Ground 2(d)

Ground 2(e)

Respondent’s submissions

Ground 2(a)

Ground 2(b)

Ground 2(c)

Ground 2(d)

Ground 2(e)

No failure to consider criminal judgment

Ground 2(a)

Ground 2(b)

Ground 2(c)

Ground 2(d)

Ground 2(e)

Ground 3: failure to give proper weight to the findings of Crush and Haul (criminal)

EPA’s submissions

Respondent’s submissions

No failure to attribute proper weight

Ground 1: failure to apply correct statutory test

EPA’s submissions

Respondent’s submissions

No failure to apply correct statutory test

Costs

Orders

JUDGMENT

1. The Environment Protection Authority (EPA) appeals pursuant to s 56A of the Land and Environment Court Act 1979 (NSW) (LEC Act) a decision of an acting commissioner (AC) in Class 1 proceedings Crush and Haul Pty Ltd v Environment Protection Authority [2023] NSWLEC 1367 (Crush and Haul (class 1)).

2. The Respondent Crush and Haul Pty Ltd has the benefit of a development consent under the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) for ‘extractive industry (quarry extension)’ at a quarry known as Corindi Quarry (the Land). The activities permitted on the Land by the development consent include ‘scheduled activities’ listed in Sch 1 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act), namely ‘crushing, grinding or separating’ and ‘extractive activities’ under cll 16 and 19 respectively. To carry out scheduled activities a person requires an environment protection licence (EPL) pursuant to s 48. The Respondent submitted an EPL application to the EPA which did not determine the application.

3. The Respondent successfully appealed the deemed refusal by the EPA in Crush and Haul (class 1). The AC found that the Respondent was a fit and proper person for the purpose of holding an EPL. The AC granted the Respondent an EPL to carry out scheduled activities at the Land as provided by s 55 of the POEO Act.

4. The EPA alleges the AC made numerous errors of law in Crush and Haul (class 1) in this appeal. The EPA bears the onus of proof of establishing the errors it alleges.

Protection of the Environment Operations Act 1977 (NSW)

5. Relevant sections of the POEO Act provide:

Chapter 3 Environment protection licences

Part 3.1 Introduction

…

45 Matters to be taken into consideration in licensing functions

In exercising its functions under this Chapter, the appropriate regulatory authority is required to take into consideration such of the following matters as are of relevance—

…

(f) whether the person concerned is a fit and proper person,

…

Part 3.3 Issue, transfer and variation of licences

…

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

…

Part 3.8 Miscellaneous

83 Fit and proper persons

(1) This section has effect in determining whether a person is a fit and proper person as referred to in section 45 (f) and section 79 (5) (f), but does not limit the generality of those sections.

(2) The appropriate regulatory authority may take into consideration any or all of the following—

(a) that the person has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation,

(b) that, if the person is a corporation, a current or former director of the corporation or of a related body corporate—

(i) has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation, or

(ii) is or has been the director of another body corporate that has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation,

(c) the person’s record of compliance with the environment protection legislation,

(d) if the person is a corporation, the record of compliance with the environment protection legislation of any current or former director of the corporation or of a related body corporate,

(e) whether, in the opinion of the appropriate regulatory authority, the management of the activities or works that are or are to be authorised, required or regulated under the relevant licence are not or will not be in the hands of a technically competent person,

(f) whether, in the opinion of the appropriate regulatory authority, the person is of good repute, having regard to character, honesty and integrity,

(g) if the person is a corporation, whether, in the opinion of the appropriate regulatory authority, a current or former director of the corporation or of a related body corporate is of good repute, having regard to character, honesty and integrity,

…

(3) A reference in subsection (2) to a director of a body corporate extends to a person involved in the management of the affairs of the body corporate.

(4) Without limiting the generality of the above, the appropriate regulatory authority may disregard contraventions referred to in subsection (2) having regard to the seriousness of the contraventions, the length of time since they occurred, and other matters that appear relevant to the appropriate regulatory authority.

…

Chapter 9 Miscellaneous

…

Part 9.2 Appeals

287 Appeals regarding licence applications and licences

(1) The following persons aggrieved by a decision of the appropriate regulatory authority about a licence or licence application may, within the prescribed period, appeal the decision to the Land and Environment Court—

(a) for a licence—a person who has held the licence,

(b) for a licence application—the applicant.

…

(2) An appeal under this section extends to a decision to refuse the licence application, to impose conditions on the issue of a licence, to vary the conditions of a licence, to revoke or suspend a licence, to refuse to approve the surrender of a licence, to impose conditions on a revocation, suspension or surrender of a licence or to attach any new conditions to, or to vary any conditions of, a suspension, revocation or surrender of a licence.

…

(3) For the purposes of this section, a licence application is taken to have been refused—

…

(c) in any other case, if the application is not granted within 60 days after it is duly made.

…

Grounds of s 56A appeal

6. The appeal grounds in the Amended Summons Commencing Appeal are extracted where relevant in the judgment. The issues raised in this appeal according to the EPA are as follows:

1. Whether the AC failed to apply the correct statutory test as required by ss 45(f) and 83 of the POEO Act (Ground 1);

2. Whether the AC failed to consider certain findings made by Preston CJ, who convicted the Respondent of an offence contrary to s 48 of the POEO Act and the sole director of the Respondent of an executive liability offence for that same conduct (Ground 2);

3. Whether the degree of weight placed by the AC on the convictions of the Respondent and its sole director was so minimal as to sound in a legally unreasonable decision (Ground 3); and

4. Whether the AC’s ruling (at [108]) that the evidence of the Respondent’s sole director’s claims of misconduct on the part of the EPA was not relevant to the statutory task under ss 45 and 83 of the POEO Act, and the attendant failure to have regard to the relevant material, resulted in a legally unreasonable decision (Ground 4).

7. The grounds are dealt with in the judgment in the order presented by the EPA in the s 56A appeal hearing (4, 2, 3, 1).

8. The EPA tendered a two-volume Appeal Book (Ex A) containing copies of the Summons Commencing Appeal, Crush and Haul (class 1), transcript of the Class 1 hearing, Exs A-H, J and Exs 1, 3, 4, 5 before the AC, the EPA’s written submissions before the AC and letters from the Respondent and the EPA dated 29 July 2016 and 19 August 2016 respectively.

Principles applied in s 56A appeal

9. I outlined the principles relevant to determining a s 56A appeal in Hoy v Coffs Harbour City Council [2015] NSWLEC 128 (Hoy) at [7]-[11]:

[7] It is important to state at the outset the principles which apply in appeals under s 56A of the Court Act in matters of this kind. Principles which have been well recognised as applying to s 56A appeals are correctly stated in the Council’s submissions and these were drawn on and further developed in this and the following paragraphs. An appeal must identify a question of law explicitly or implicitly decided at first instance: Warkworth Mining Ltd v Bulga Mulbrodale Progress Association Inc [2014] NSWCA 105; (2014) 86 NSWLR 527 at [4]. That question must also be sufficiently material that a wrong answer vitiates the decision: Sydney Water Corporation v Caruso [2009] NSWCA 391; (2009) 170 LGERA 298 at [29], [133]-[136] and [191]. The question must also arise from a contest or dispute between the parties: Edyp v Brazbuild Pty Ltd [2011] NSWCA 218 at [147], [160] per Basten JA. The merits of a commissioner’s decision cannot be the subject of a s 56A appeal.

[8] An appeal under s 56A is “on a question of law” not limited, however, to “an error of law”: ISPT Pty Ltd v Valuer General [2009] NSWCA 31 (2009) 165 LGERA 25 at [3] per Allsop P. In the absence of any statutory indication of the weight to be given to various considerations, an allegation that insufficient weight was given to particular evidence is generally insufficient as a ground of appeal: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24 at 41, Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at [57], Hoskins v Waverley Council [1999] NSWLEC 236 at [11]-[12].

[9] A commissioner or judge of the Court is required to address relevant material issues by exposing his or her reasoning: Segal v Waverley Council [2005] NSWCA 310; (2005) 64 NSWLR 177 at [43] per Tobias JA, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 259 per Kirby P, at 279 per McHugh JA. The Court at first instance is not required to “deal with every argument raised and every possibility that could be adverted to”: Comcare v Forbutt [2000] FCA 837 at [58] per Heerey J cited by Tobias JA in Segal at [71].

[10] The judgment should be read on the basis that the Commissioners and the parties were present and understood the issues presented by them: see by analogy Southon & Ors v Gordon Plath on behalf of the Department of Environment and Climate Change [2010] NSWCCA 292; (2010) 181 LGERA 352 at [79].

[11] An approach to finding error that is nitpicking with an eye to identifying error is not permissible, as identified in numerous authorities commencing from Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 at 368. Very importantly, a judgment must be considered as a whole, not selecting parts of the judgment and reading them out of context: Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 291, O’ Donnell v Sutherland Shire Council [2011] NSWLEC 184 at [23].

10. I also adopt the following principles relevant to the determination of such appeals as conveniently summarised by Pepper J in Tanious v Georges River Council [2016] NSWLEC 142 (Tanious) at [10] as follows:

[10] …A “verbal slip or infelicity of expression does not necessarily warrant drawing an inference of an error of law” (Council of the City of Sydney v Base Backpackers Pty Ltd [2015] NSWLEC 63 at [57]);

…

fifth, an error will not be material to the decision if the matter complained of on appeal was a matter that was not the subject of submissions made to the Commissioner below in a way that called for a reasoned consideration of that matter: Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385–386 and Davis v Gosford City Council [2013] NSWLEC 49 at [75]. A party is bound by the way it conducted its case at the hearing: Bankstown City Council v Mohamad El Dana [2009] NSWLEC 68 at [47]–[55] and Davis at [75]–[77].

Ground 4: failure to consider relevant matter

11. Ground 4 is extracted from the Amended Summons Commencing Appeal as follows:

4. In finding that evidence given by Luke Cauchi in cross-examination that an officer of the EPA had planted asbestos at a property at Badgerys Creek and attempted to frame him with that asbestos was “not… relevant as to whether [Crush and Haul] is a fit and proper person to hold the Licence applied for concerning Corindi Quarry” (at [108]), the Assistant Commissioner:

a. failed to consider relevant material which was central to the task of determining whether Crush and Haul is a fit and proper person to hold an EPL (including because they pertained to the honesty and integrity of Luke Cauchi); and/or

b. acted irrationally, illogically and/or unreasonably.

Extract of AC’s Judgment

12. The AC addressed the allegation the subject of Ground 4 in Crush and Haul (class 1) at [108] extracted below:

[108] For completeness I note that I make no findings in relation to Mr Luke Cauchi’s claims of improper conduct by the EPA in 2016 in relation to a property at Badgerys Creek as there was no evidence of these allegations presented to me by either party (other than one letter from the applicant to the respondent dated 16 June 2017 (Ex 5) and Mr Cauchi’s assertions during the hearing) and I do not consider them to be relevant as to whether the applicant is a fit and proper person to hold the Licence applied for concerning Corindi Quarry.

Transcript

13. The parties referred to sections from the transcript of the Class 1 hearing on 13 June 2023 extracted below:

…

[18(24-34)]

[Beasley, Counsel for EPA] Q. It can cause mesothelioma. Did you have an asbestos management plan for this site?

[Mr Cauchi, Director of Respondent] A. Well did I? No, because we weren't dealing with asbestos. You guys tested every pile in the quarry and one of your people were caught planting asbestos in one of the piles. Youse then withdrew the accusation that there was biscuits in the piles because every pile that was there that was labelled by a Crush and Haul stockpile sight, except for the one or the two that were responsible of Michael Vickery of which you pursued him years after me. Youse fined and followed him up for that because I didn't remove that pile, I removed every other pile from that site except for the asbestos piles because the asbestos piles weren't discovered to have asbestos in them until you guys come and took tests of that material.

…

[20(38)-21(18)]

COMMISSIONER

Q. I think it is relevant to understand when you said you didn't think it was a reasonable price--

A. Sorry, Commissioner, if I could add. So I take you back to 2016. I've got a yard that we're trying to get going and it gets closed down. This gets performed, this gets performed and then Melissa plants a piece of asbestos into my pile--

BEASLEY: I object to this.

Q. Just a second, Mr Cauchi, just a second.

BEASLEY: I object to this. This is not an answer to the question. Mr Cauchi has been served - Crush and Haul, courtesy of Mr Cauchi as its sole director, has been served with a notice requiring payment of these expenses. The witness has already told us he hasn't paid and his answer as to why it wasn't paid was that he didn't think it was reasonable.

WITNESS: Because the - sorry, if I'm allowed to talk, can I know when I'm allowed to talk, mate? Because you're actually cutting in.

BEASLEY

Q. Go on, I'll actually let you go.

A. So basically, you guys, you guys are the one that backed out and never pursued, I didn't pay because youse were in the - youse were the ones that were trying to frame me with the asbestos. I did remove all the material because it wasn't supposed to be there, I did get it removed. It wasn't removed by your date, okay? Paid the fine and then the clean-up notice. Well I cleaned the place up.

…

[36(47)-37(45)]

COMMISSIONER: Just as a matter of procedure. I realise, and apologies, I didn't formally excuse Mr Cauchi earlier--

BEASLEY: …the witness had raised an allegation with the EPA planting the asbestos.

COMMISSIONER: Yes.

BEASLEY: …So I would ask that Mr Cauchi go back in the witness box please so I can get some clarification from him about that allegation.

COMMISSIONER: Mr Lazarus?

LAZARUS: The only thing I’d wish to say is I'm not going to be putting any submission to the Court because it's entirely irrelevant that the EPA planted anything.

BEASLEY: I don’t care about that. I care about the allegation made and I want to ask a question about it. This is about whether this applicant is fit and proper to have an EPL. I want to ask what was meant by that. That's his evidence, I'm entitled to ask a question.

COMMISSIONER: We have no evidence before us. It doesn't form part of the applicant's case.

BEASLEY: It's an answer given by this witness. I must be able to ask a question about it, with respect.

COMMISSIONER: I'll allow the question but I will take the relevance as a - I'll consider the evidence.

BEASLEY: I'm not following that. This is an answer that this witness gave, it becomes relevant once he's given that answer. I have to be entitled to put a question about it.

LAZARUS: Only if it's relevant to an issue which is properly raised in the contentions.

BEASLEY: I was asking about asbestos, we were asking about the penalty notice which is in issue. It's pleaded.

COMMISSIONER: I'll allow the question but I would like it to stay within the confines of this application.

…

[38(16)-39(40)]

Q. Do you remember I - dropping about two thirds of the way down the page - I was asking you some questions about asbestos, do you recall that?

A. Yes.

Q. Did you tell the Court that that asbestos had been planted by someone by the EPA?

A. Yes.

Q. Who?

A. Melissa Ward.

Q. She planted it?

A. Yes.

Q. An EPA officer planted the asbestos?

A. Yes.

Q. You saw that?

A. Yes.

Q. You saw her walk onto this site with a piece of asbestos and drop it there?

A. I was distracted by one of the EPA officers. I was pulling the pads for him on the excavator. There was found to be no asbestos on the site, except for the friable. So this was a piece of bonded asbestos. There's photographs in your records and mine to show those pieces and the EPA withdrew the findings of that asbestos after we threatened the EPA with some action because we found you could tell from the photo that the piece had been put on the pile.

And there as no, there was no asbestos found in any of our stockpiles and that's the reason why the costs for the testing of the stockpiles was never agreed upon and paid because you - EPA withdrew their - we withdrew their findings with the bonded piece of asbestos that they found.

So that they then pursued Michael Vickery for the friable asbestos because they could not connect those two stockpiles with Crush and Haul as there was aerial shots given to you guys in our correspondence that showed that those two stockpiles that had the friable asbestos were there prior to Crush and Haul entering the site.

Q. That was a very long answer. Dealing with it, breaking it up. The EPA officer's name was, did you say, was Melissa Wood?

A. Ward, W-A-R-D.

…

Q. Did you see her take the asbestos on the land, and drop it somewhere?

A. I seen the same piece--

Q. Did you see her take the asbestos on the land, and drop it there, yes or no?

A. No.

Q. You say you threatened the EPA with some form of litigation, what was that?

A. No, there was a correspondence with the EPA that we would take it further if they did not withdraw.

Q. Where is the correspondence?

A. I haven't got it on me.

Q. Was it from Crush and Haul?

A. Yes.

Q. I call for production of this letter to the EPA?

…

[40(35)-41(7)]

COMMISSIONER: Closing submissions is where the parties want to go now?

BEASLEY: No, I'm now having to get my client to make inquiries of this person, Melissa Ward, as to whether she planted asbestos on the site that Crush and Haul was occupying because that's the allegation. It's a pretty serious allegation to make against an officer of the EPA. I'm doing the best I can.

I don't want to hold up submissions though. It's just that when submissions end I might need to either make some form of application, I don't know yet. We may not be able to contact - who knows where Melissa Ward is. She may not even work for the EPA anymore, I don't know.

COMMISSIONER: You'd be happy to proceed with closing submissions?

BEASLEY: I don't think we should waste the time we've got now even if something further happens.

COMMISSIONER: Flagging that even when you finish closings, you might want to have a further–

BEASLEY: Ultimately I’ll have to take some further instructions and deal with it then but I can’t deal with it absolutely right now.

…

[49(4)-(33)]

BEASLEY: Just before Mr Lazarus resumes, Mr Cauchi, in his evidence relating to the matter we were discussing concerning the 2016 penalty notice and he said there was correspondence with the EPA concerning Ms Ward, I’m told the file is really big but at the moment that the only correspondence can be found is a, there might be more and we’ll keep checking, but is a letter from Crush and Haul signed by Mr Cauchi dated 16 June 2017 so approximately ten months or so after the penalty notices are issued. And an EPA response that’s got a stamp dated 15 August 2017.

I’ll tender them. I don’t want to read them out to you because I don’t think it’s fair to the person involved, but what you’ll see from the Crush and Haul letter is that there is a substantial complaint about Melissa Ward, although no complaint about planting evidence. The letter from the EPA is just a rejection of those allegations. I’ll tender those, that correspondence please.

One thing I don’t want this going off onto and I’m sure – well I won’t speak for Mr Lazarus but I’d be very disappointed if we ended up – well I’m not going to be asking you to make – resolve what happened back in 2016 regarding asbestos, but this is just to complete the picture.

COMMISSION[ER]: Mr Lazarus, do you have a copy of these documents?

LAZARUS: I do and I don’t want to spend time arguing a relevance objection but they can be taken subject to relevance.

COMMISSIONER: Very well.

EXHIBIT #5 CORRESPONDENCE BETWEEN CRUSH AND HAUL AND EPA DATED 16/06/17 AND 15/08/17 TENDERED, ADMITTED WITHOUT OBJECTION

…

[59(13)-(27)]

[LAZARUS:] The EPA through the cross-examination of Mr Cauchi appears to wish to raise an issue relating to asbestos contamination which has hitherto not found its way into any contention that has been raised by the EPA concerning the fit and proper person criterion or otherwise in these proceedings. No further action was taken by the EPA so far as the evidence would disclose. There’s no evidence of environmental harm. We submit our primary position is you don’t need to go into any of this because the penalty notices are to be given no weight.

But in the event you do, you do have Mr Cauchi’s evidence earlier today that the relevant stockpiles were there when Crush and Haul commenced operations and that Crush and Haul was unaware of the asbestos until the EPA commenced testing. But as I say, perhaps the one thing I agree with Mr Beasley, is that you making findings in relation to the asbestos issue is at best an irrelevant distraction, not something that is really necessary in the circumstances of this case.

…

14. Sections from the transcript of the Class 1 hearing on 14 June 2023 referred to by the parties are extracted below:

[1(47)-3(31)]

LAZARUS: … A call was made yesterday relating to correspondence concerning the asbestos issue. There are some documents that have been provided to the EPA in answer to that call. We are still in the process of reviewing our IT systems to see whether there are any additional documents. It is like that, as a result of that process, I may wish to tender some further material but, that said, I’m not in a position formally, as it were, to close my case until that process is complete.

COMMISSIONER: Mr Beasley, do you press these documents?

BEASLEY: Just so you know, yes, the EPA–

COMMISSIONER: You said that they’re relevant?

BEASLEY: Sorry, I didn’t catch you.

COMMISSIONER: I just want to understand that the EPA is arguing that these documents are relevant to the application at hand.

BEASLEY: No because I don’t know. I called for a specific document, if there was such a document, which–

COMMISSIONER: And you provided me with a letter, yes.

BEASLEY: --had an allegation of planting of evidence. I think I tendered some letters yesterday but there’s been further searching by the EPA of its files and there’s nothing along the lines that the EPA can find on that issue, nothing further involving Ms Ward or matters relating to the alleged planting of asbestos. So there’s nothing further the EPA can produce or tender either.

COMMISSIONER: I’m just trying to understand what document that could be produced, how they would be relevant to the consideration of this application. I want to understand from you why you think the documents that could be provided – I know you’re saying you don’t know what they might be – would be relevant.

BEASLEY: The director of this applicant made an allegation that the EPA plants evidence, the current director of this applicant. Having given that evidence, I called for whether there was such a letter that put forward that allegation. I don’t know whether there is or there isn’t. We’ve produced what we can. If there’s no such documentary evidence, the documentary side of that doesn’t go any further.

COMMISSIONER: Yes, and, Mr Lazarus, you think there might be some documents that go to this point? Have some documents been identified that go to this point or are you’re still searching?

LAZARUS: We’re still in the process of searching and, whether this is formally part of the call or not, it was put quite specifically by my learned friend to Mr Cauchi that there was no written complaint made about the costs of compliance. It appears, but subject to further checking, that there was such a complaint made. So there might be the odd letter or two that I may need to tender but I don’t want to formally close my case until those searches are complete. I don’t submit for a moment that any of this material lies at the heart of this case but it was an issue opened up by my learned friend in cross-examination and if I need to tender material to deal with it then I should be permitted the opportunity, in my submission, to do so.

COMMISSIONER: Do you have an understanding of timing?

LAZARUS: I’m sorry, Commissioner.

COMMISSIONER: No, that’s fine.

LAZARUS: I’m told that we’re aiming to have completed it by tomorrow but I understand no guarantees can be provided in that respect. That’s as good as I can do at the moment in relation to that particular matter.

BEASLEY: I’ll take some instructions on this but I’ll say it out loud so my instructors can hear. I was talking about the allegation of planting evidence. Mr Lazarus is talking about an assertion by the applicant at an earlier time that the costs sought were excessive or unreasonable, which is consistent with the evidence that Mr Cauchi himself gave that he unilaterally thought that these were unreasonable.

If it’s only in relation to that I could get some instructions to say that the EPA accepts that Mr Cauchi himself was unhappy about the $66,000 or some words to that effect to try and shortcut, but I was talking not so much unhappiness with the 66,000 but I was talking about the other really serious allegation that we’ve discussed. Whether there’s some correspondence about the 66,000 is not really I think going to be decisive of the outcome of these proceedings. I can talk about that at morning tea or see if we can resolve it somehow.

…

[30(13)-(34)]

LAZARUS: No, I don’t it’s a ping pong match where I should get another say. I’m content to leave matters where they stand. I just wanted to reiterate we haven’t completed our documentary inquiries in answer to the call. I’m content to leave it on the basis that, unless you hear from the parties by the end of the week, it’s probably safe for you to reserve your judgment subject to that matter unless obviously you have any other matters to raise with Mr Beasley or me.

BEASLEY: We’ll do the same search. If we find a letter from the applicant that says asbestos was planted we’ll do something about it but otherwise I think you can take it that the case is done and you’re reserved.

COMMISSIONER: So the parties are happy for me to reserve judgment now with the note that further documents may be provided and presumably with some kind of proposition by the parties as to what those documents go to or how I might want to--

BEASLEY: If anything came up we’d have to discuss it amongst ourselves first as to whether it’s worth tendering and whether there’s any objection, et cetera. I suspect it’s unlikely anything further is going to happen but, if it did, we’d take that process and I think it is good to set a deadline of close of business this Friday so that you know everything is done and dusted with the exception of your determination.

…

Exhibit 5 in Class 1 proceedings – Letters between EPA and Respondent dated June and August 2017

15. Following the call for documents (see above in [13]) the EPA called for correspondence relating to the allegation by Mr Cauchi of asbestos dumping at Badgerys Creek. In the course of closing submissions before the AC, the EPA identified and tendered these documents being letters from the Respondent to the EPA dated 16 June 2017 making a complaint about an officer of the EPA and a reply letter from the EPA to the Respondent dated 15 August 2017. I note that the complaint was not that asbestos was planted on the Respondent’s land at Badgerys Creek by an EPA officer.

Email dated 16 June 2023 enclosing letters between EPA and Respondent

16. At the end of the Class 1 hearing the parties were allowed to provide further documents by 16 June 2023 relating to the call for documents (see above in [14]) made by the EPA during the Class 1 hearing. An email was sent to the AC by the EPA on 16 June 2023 with the consent of the Respondent enclosing a letter from the Respondent to the EPA dated 29 July 2016 and a letter in reply from the EPA to the Respondent dated 19 August 2016. The email sent to the AC is extracted below:

…

I am solicitor for the Respondent in the above proceedings. I have included the solicitor for the Applicant in this email, who consents to this communication.

When reserving judgment in the above proceedings, Acting Commissioner Targett noted the parties were continuing to search for the correspondence Mr Luke Cauchi described alleging an EPA officer had placed an asbestos fragment on a stockpile at a premises in Badgerys Creek.

EPA officers have located the attached two letters, being a letter from Mr Luke Cauchi to EPA officer Ms Celeste Forestal dated 29 July 2016 and a reply from EPA officer Mr Christopher McElwain dated 19 August 2016.

The parties do not consider the letters raise any issues which would require the Court be addressed further. However, we draw to the Court’s attention that the allegation at page 2 of the letter from Mr Cauchi does not accuse an EPA officer, and instead alleges: “we believe that this fragment may have been placed there by possibly a disgruntle employee or contractor…”.

We have conferred with the Applicant and this correspondence may be tendered by consent.

May it please the Court.

…

EPA’s submissions

17. The EPA submitted an error of law may arise from a misapplication of the correct statutory test or misunderstanding of the law, irrational, illogical or unreasonable reasoning or decision-making, and/or from failing to have regard to relevant material (including claims, issues or evidence): Muscat Developments Pty Ltd v Wollondilly Shire Council [2023] NSWLEC 121 (Muscat Developments) at [32]-[33], Craig v South Australia (1995) 184 CLR 163; [1995] HCA 8 at 179. Failure to have regard to relevant material may result in a constructive failure to exercise jurisdiction: Georges River Council v S A F Group Pty Ltd [2021] NSWLEC 151 at [22], [46]-[48]. The duty to have regard to relevant material requires engagement with, and evaluation of, its contents: Weal v Bathurst City Council (2000) 111 LGERA 181; [2000] NSWCA 88 at [80], Plaintiff M1/2021 v Minister for Home Affairs (2022) 96 ALJR 497; [2022] HCA 17 (Plaintiff M1) at [24] (Kiefel CJ, Keane, Gordon and Steward JJ) and [43] (Gageler J).

18. A decision-maker is required to give real, genuine, and proper consideration to the information before them and the submissions made. A failure to refer to a relevant claim or issue (and/or to relevant material) may ground an inference that there has been a failure to consider it: Village McEvoy Pty Ltd v Council of the City of Sydney (No 2) (2010) 176 LGERA 119; [2010] NSWLEC 17 (Village McEvoy) at [74]-[77], Plaintiff M1 at [24]-[27], [108], Jabari v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs (2023) 298 FCR 431; [2023] FCAFC 98 at [55], [60]. A claim or issue need not be expressly articulated, it can arise clearly on the material: Plaintiff M1 at [25]. An error will be material if, had it not been made, the decision under challenge could realistically have been different: Nathanson v Minister for Home Affairs (2022) 96 ALJR 737; [2022] HCA 26 (Nathanson) at [1].

19. During the hearing before the AC Mr Cauchi made a very serious allegation against the EPA that one of its authorised officers planted asbestos at a property at Badgerys Creek which the Respondent occupied. There was no evidentiary foundation for that allegation. Having found that there was no evidence of the allegations, the AC did not consider the allegation relevant as to whether the Respondent was a fit and proper person to hold the EPL.

17. Raised as relevant to the sole contested issue before the AC was the fact that Mr Cauchi was prepared to make such an allegation at all (and, in turn, that it was unable to be substantiated once a call was made for Mr Cauchi to produce the documents he alleged existed and supported that allegation). In refusing to consider that evidence as stated at [108] of Crush and Haul (class 1), the AC erred in law as she failed to consider relevant material before her and her conclusion was irrational, illogical and/ or unreasonable. The AC’s conclusion was also devoid of any reasoning.

18. The material tendered by way of email on 16 June 2023 was not mentioned at all in Crush and Haul (class 1), despite the EPA’s solicitor having drawn attention to the inconsistency between the letter of 29 July 2016 and Mr Cauchi’s allegations in cross-examination. The AC only dealt with the allegations at [108] Crush and Haul (class 1) (see above in [12]).

19. The total failure of the AC to refer to the material tendered on 16 June 2023 supports an inference that she failed to have any regard to at least so much of that material that (i) exposed an inconsistency between the oral evidence of Mr Cauchi that an officer of the EPA planted asbestos at the property at Badgerys Creek and the claim in that correspondence (that asbestos may have been placed there by a disgruntled employee or contractor), and (ii) showed that Mr Cauchi had a propensity to make serious, unfounded allegations to justify alleged failures to comply with a clean-up notice and a costs compliance notice. That failure to consider relevant material is a further error of law.

20. The only part of the AC’s decision in which reference was made to this correspondence was in the context of considering s 83(2)(b) of the POEO Act in so far as that consideration concerned the conduct of Mrs Cauchi as a former director (at [85], [117], [120] of Crush and Haul (class 1)). Plainly, however, that same material was relevant also to s 83(2)(g). It was also relevant to the AC’s assessment of Mr Cauchi as a director of the Respondent, not merely to a consideration of Mrs Cauchi. The failure to consider this material in these contexts, which went directly to the issue of fitness and propriety, was yet a further error of law.

21. While parties are ordinarily bound by the way a case was conducted, an appellate court retains a discretion to permit an appellant to argue an issue on appeal that was not argued before the AC where it is considered expedient and in the interests of justice: Woodhouse v Comcare (2021) 285 FCR 14; [2021] FCAFC 95 (Comcare) at [46]-[49]. That applies to statutory appeals from administrative decision-makers on questions of law: Peacock v Repatriation Commission (2007) 161 FCR 256; [2007] FCAFC 156 (Peacock) at [22]. The AC was not exercising judicial power: Ku-ring-gai Council v Bunnings Properties Pty Ltd (2019) 236 LGERA 35; [2019] NSWCA 28 at [181]-[184], [189]-[190]. To the extent that the Court considers that any issues raised by the EPA were not expressly put before the AC, it should exercise its discretion to permit the EPA to raise them on appeal. Each of the grounds raises a question of law, each is based on the evidence before the AC, none is of a kind that could have been met by the Respondent calling further evidence at first instance, and it is otherwise expedient and in the interests of justice to allow the issues to be addressed on the appeal.

22. The allegation was made during the hearing in response to questions about non-compliance with penalty and costs notices going to the fitness and propriety of the Respondent to hold an EPL. Hence, the point was not pleaded, and the parties’ written submissions and documentary evidence filed prior to the hearing did not address it. The EPA’s Statement of Facts and Contentions in Reply (SOFAC in Reply) raised an issue that Mr Cauchi was not of good repute and more generally the Respondent was not a fit and proper person (see below in [69]).

23. The EPA made clear in the Class 1 hearing the very fact the allegation was made was relevant to the whether the Respondent was a fit and proper person to hold an EPL. The Respondent ignored that submission made by the EPA. The EPA made no submission the allegation was irrelevant or did not go any further. The EPA did not ask the AC to resolve the factual question of whether asbestos had been planted. This question was different from the EPA’s contention that an unsupported allegation of criminality on the part of the EPA went to fitness and propriety.

24. The Respondent’s counsel in the hearing before the AC did not press an objection, save as to relevance, to the EPA pressing its contentions as to the asbestos allegations (see above in [13]). The Respondent made submissions on the issue (see above in [13]). Section 38(1) of the LEC Act provides Class 1 proceedings are to be conducted with little formality and technicality.

25. Identifying the allegation, Mr Cauchi’s oral evidence and Ex 5 before the AC (not the material tendered in June 2016) at [108] in her reasons demonstrates the AC did consider the allegation an issue that required addressing. Questions as to Mr Cauchi’s character, honesty and integrity, including whether his evidence ought to be accepted, were treated by the AC as central to her decision. It was irrational, illogical and unreasonable for the AC to elect to ignore evidence of Mr Cauchi’s propensity to make serious, unsubstantiated allegations against the EPA, for example Ex 5, while placing substantial weight on his other evidence. The AC’s choice was arbitrary and unreasonable.

26. The contents of Ex 5 were relevant to the assessment of Mr Cauchi’s and the Respondent’s character, honesty and integrity, and was evidence which contradicted, undermined or otherwise cast doubt upon Mr Cauchi’s statement of his genuine remorse and honesty. This evidence was required to be considered before any finding could be made to accept Mr Cauchi’s evidence (such as Crush and Haul (class 1) at [70], [103]-[110], [111]-[113], [120], [125], [144], [153], [178]). The bare conclusion at [108] that such evidence was not relevant to the issues before the Court was an error. No reasonable decision maker in the AC’s position could have found that evidence was irrelevant to the question of fitness and propriety of the Respondent.

27. The error was not immaterial. The evidence that was sidelined related to Mr Cauchi’s character, honesty and integrity, matters which went to the heart of the Respondent’s fitness and propriety. It was far from insignificant. Had the AC considered the evidence, she could have reached a different view as to character, honesty and integrity (and as to whether the EPL should be granted).

Respondent’s submissions

31. An appeal under s 56A of the LEC Act against a decision made by a Commissioner is limited to an order or a decision of the Court on a question of law.

32. The oral evidence of Mr Cauchi and Ex 5 were expressly referred to at [108] in Crush and Haul (class 1) and found to be irrelevant. The cover email and attached 2016 correspondence were not expressly referred to in the reasons. This ground fails for at least seven reasons.

33. First, the EPA’s contention above in [17]-[21] is entirely new and not the subject of submissions made before the AC, let alone in a manner requiring reasoned consideration in the AC’s reasons for decision. The EPA does not identify where submissions were made in the proceedings that support Ground 4. A review of the transcript and evidence demonstrates that no such submissions were made.

34. The email to the Court enclosing the 2016 correspondence from the EPA stated that ‘The parties do not consider the letters raise any issues which would require the Court be addressed further.’ That is, the EPA expressly eschewed the opportunity to make any submissions regarding that material. At no point did the EPA put a submission to the AC in the terms now sought to found Ground 4. At most the EPA noted in the email to the Court that ‘…we draw to the Court’s attention that the allegation at page 2 of the letter from Mr Cauchi does not accuse an EPA officer, and instead alleges: “we believe that this fragment may have been placed there by possibly a disgruntle[d] employee or contractor”.’ The mere drawing to the AC’s attention of a matter in the terms stated, in circumstances where it is otherwise said that the correspondence does not raise any issues which would require the AC be addressed further, cannot be elevated to foreshadow any of the submissions now sought to be advanced as founding an error of law.

35. The proposition that matters which were not the subject of submissions before the court should not be permitted to be raised for the first time on appeal was recently reaffirmed by the Court of Appeal in Sydney Metro v Expandamesh Pty Ltd [2023] NSWCA 200 (Expandamesh) at [87] (Leeming JA and Griffiths AJA).

36. Secondly, the EPA expressly indicated to the AC it was not asking for any findings as to the events of 2016 relating to asbestos. That is contrary to the position the EPA now seeks to take, to ask the Court to conclude that Mr Cauchi’s allegations were ‘unfounded’. The EPA should not be permitted to advance a ground of appeal to the extent that the matters sought to be raised required an interim finding of fact as to whether there was in fact asbestos at a property in Badgerys Creek as a step to making any further findings.

37. It is plainly not unreasonable for the AC to consider that Ex 5 was irrelevant when it was tendered in the context of being told that it was not being asked to resolve what happened back in 2016. The EPA is bound by its conduct at first instance and should not be permitted to mount a different case on appeal.

38. The findings recorded by the AC in Crush and Haul (class 1) at [108] as to the absence of evidence of Mr Cauchi’s claims of improper conduct by the EPA (other than the oral evidence of Mr Cauchi and Ex 5), and therefore (correctly) considering them to be irrelevant, should be understood in the context of the EPA’s submissions that it was not asking the AC to resolve allegations of asbestos in 2016. Accordingly, matters which required a finding as to the existence or otherwise of asbestos in 2016 (including as a step in making further findings of fact) were not in issue.

39. Thirdly, if this matter was as significant as the EPA now claims it to be, it ought to have made an application to amend its pleading and, if thought expedient, to re-open its case to lead further evidence. The EPA’s senior counsel expressly adverted to the possibility that some such application might be made by the EPA (see above in [13]). It is telling that none was forthcoming.

40. Fourthly, as a preliminary threshold the EPA has not sufficiently demonstrated that the matter has not been taken into account. The absence of reference in the reasons for decision of material tendered by the EPA on 16 June 2023 does not support an inference that there was a failure to have regard to that material: Ceerose Pty Ltd v A-Civil Aust Pty Ltd [2023] NSWCA 215 (Ceerose) at [61]‑[63] (Payne JA, Ward ACJ agreeing at [1]). It was not a principal contested issue identified in the pleadings, and therefore no obligation was upon the AC to refer to such evidence in its reasons. In any event, it is clear from [108] in Crush and Haul (class 1) that the AC did in fact have regard to the substance of this matter. She was perfectly entitled to dismiss it as irrelevant, as it was.

41. Fifthly, even if, contrary to the Respondent’s position, it may be assumed that the AC failed to consider the material tendered on 16 June 2023, that does not amount to an error of law. Evidence must be ‘critical’ (as opposed to peripheral or even material to the issue) for a failure to consider it to amount to an error of law: Torbey Investments Corporated Pty Ltd v Ferrara [2017] NSWCA 9 at [61], [68]; Muscat Developments at [32], [45], [47]. The context in which that evidence was tendered plainly indicates the peripheral nature of the material.

42. Sixthly, to the extent that the EPA submitted that the AC’s decision in this respect was legally unreasonable, it is worth recalling the very high threshold that is required to be demonstrated by the EPA, and the very limited number of cases in which such a claim is upheld: Randwick City Council v Belle Living Pty Ltd (No 2) [2023] NSWLEC 100 at [134].

43. Seventhly, the EPA has not demonstrated how the error (if there be one) was material to the ultimate decision. It is difficult to see how the fact that a claim was made by Mr Cauchi in the heat of cross-examination that an EPA officer planted a piece of asbestos on the Badgerys Creek land was anything other than an irrelevant distraction from the real issues in the proceedings. (I note the focus of the EPA’s case changed to place reliance on the 16 June correspondence rather than cross-examination during the hearing.)

44. The EPA is highly selective in its reliance upon evidence which it now contends is relevant to whether the Respondent is a fit and proper person. In particular it seeks to focus on Ex 5 and what is said to be a propensity to accuse the EPA of misconduct to demonstrate that the Respondent is not fit and proper. That is a mischaracterisation of the correspondence. Mr Cauchi does not criticise the EPA generally, rather criticism is made of the conduct of a specific EPA officer and is to be contrasted with positive comments made about another EPA officer in that same letter. The Respondent otherwise denies the EPA’s characterisation of that evidence, including the belated submission that it casts doubt about his genuine remorse or his honesty.

45. The proposition that Mr Cauchi made unfounded allegations to justify failures to comply with a clean-up notice and a costs compliance notice is incorrect. Mr Cauchi provided oral evidence to the AC which explained the circumstances in which there was a delay in compliance with the clean-up notice and that the costs compliance notice had not been paid because there was a real dispute about costs. In respect of the matter of costs compliance notice, the evidence as to the circumstances of non-payment was referred to by the AC in Crush and Haul (class 1) at [124]. Accordingly, the submission that there was a failure to refer to that material is wrong and emphasises that the EPA’s complaint is just a dissatisfaction with the merits of the decision.

No failure to consider relevant matter

46. The EPA submitted this ground addresses the requirement to consider s 83(2)(g) (whether of good repute, having regard to character, honesty and integrity) of the POEO Act. The authorities cited by the EPA summarised above in [17]-[18] concerning the obligation to have regard to relevant material can be accepted at a broad level but how they apply in the circumstances of this case to support the EPA’s Ground 4 is not apparent as I discuss below.

47. A key matter to consider in assessing this ground of appeal is how the EPA ran its case before the AC as the accepted principle in a s 56A appeal is that a party is bound by the way they conducted their case at first instance. The extracts of the transcript for the hearing on 13 June 2023 above in [13] show that in the course of cross-examination about a 2016 penalty notice issued to the Respondent and a failure to pay a costs notice Mr Cauchi its director made allegations about the behaviour of an EPA officer who he named. The EPA’s counsel identified that the allegation could be relevant to the question of fit and proper person and sought to ask further questions in cross-examination, which occurred (see above in [13]). The transcript shows there was some toing and froing about the existence of documents supporting such an allegation. The EPA made a call for documents concerning the allegation in the course of the hearing. Documents were produced which became Ex 5 before the AC, summarised above in [15], which the AC referred to at [108].

48. The transcript of the hearing on 14 June 2023 (last day of hearing) above in [14] shows the parties’ counsel discussed whether more documents may be produced and that further documents may be produced by the end of the week. The EPA’s counsel stated that depending on what was produced an application may be made. The Commissioner was told she could reserve judgment, with the possibility of further documents being provided within a short timeframe.

49. No oral submission along the lines now put by the EPA in this appeal was made expressly to the AC, namely that Mr Cauchi had a propensity to make unsubstantiated allegations against the EPA and this was relevant to whether the applicant company was a fit and proper person as he is its sole director. No application to make an additional submission and/or amend the EPA’s case to include this matter was made during the hearing by the EPA.

50. No written expression of Ground 4 as put in this appeal was provided to the AC. While the EPA sought to explain this on the basis the issue arose in the course of the hearing unexpectedly (as no doubt it did) so that it could not have been included in the SOFAC in Reply inter alia that does not overcome the absence of explicit written submissions on the matter if this was an issue which the EPA wished to rely on. The argument now put on appeal was not raised with the AC. This appeared to be accepted by the EPA in this appeal implicitly because in reply the thrust of the EPA’s submission was that the AC should have inferred that this was the submission it intended to make with heavy reliance placed by the EPA on the material sent to the AC on 16 June 2023 after the hearing was over and judgment reserved on 14 June 2023.

51. As the Respondent submitted no basis exists in the 16 June 2023 correspondence to support a finding that the EPA was (by inference) making the case it now puts. The second sentence in the fourth paragraph of the email dated 16 June 2023 which the EPA relied on ‘However, we draw to the Court’s attention that the allegation at page 2 of the letter from Mr Cauchi does not accuse an EPA officer, and instead alleges: “we believe that this fragment may have been placed there by possibly a disgruntle[d] employee or contractor…”’ follows a sentence in which the parties state they do not consider further submissions are warranted (see extract above in [16]). No application to reopen the EPA’s case based on the 16 June 2023 correspondence was made. Nothing occurred to alert the AC to the 16 June 2023 material having any role to play in her consideration. No obligation of the AC to refer to the 16 June 2023 material arose in relation to the assessment of Mrs Cauchi as a former director or Mr Cauchi as a director whether under subss 83(2)(b) or (g) in these circumstances.

52. The EPA relied on Plaintiff M1 stating that ‘A claim or issue need not be expressly articulated; it can arise clearly on the material.’ Plaintiff M1 at [25] states as follows (footnotes omitted):

[25] It is also well-established that the requisite level of engagement by the decision-maker with the representations must occur within the bounds of rationality and reasonableness. What is necessary to comply with the statutory requirement for a valid exercise of power will necessarily depend on the nature, form and content of the representations. The requisite level of engagement – the degree of effort needed by the decision-maker – will vary, among other things, according to the length, clarity and degree of relevance of the representations. The decision-maker is not required to consider claims that are not clearly articulated or which do not clearly arise on the materials before them.

53. Regardless of whether these observations made in judicial review proceedings concerning an administrative decision-maker acting as a delegate of the relevant Commonwealth minister exercising power under the Migration Act 1958 (Cth) can be applied to the task of the AC in this contested Class 1 appeal, about which I have my doubts given the entirely different nature of these two decision-making processes, claims must be clearly put if an AC is to engage with an argument. The effect of the above paragraph is the opposite of what the EPA submitted. Nothing obvious in the terms put by the EPA arises from the text of the email sent by the parties on 16 June 2023. Commissioners are not expected to infer a party’s case.

53. To the extent the EPA sought to make submissions about Ex 5 before the AC which the Respondent criticises as an inaccurate characterisation of that correspondence as summarised above in [32]-[44], the issue cannot be pursued on appeal because it does not reflect what occurred before the AC. I note that the Respondent’s criticisms otherwise appear justified.

54. Reliance by the EPA on s 38 of the LEC Act that Class 1 proceedings ‘shall be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act and of every other relevant enactment and as the proper consideration of the matters before the Court permit’ is entirely inappropriate. A party should ensure its case is made clearly to the Court.

55. The issue sought to be raised in Ground 4 was never put to the AC. That cannot occur now as a party is generally bound by the case it presented at first instance, see Expandamesh at [87] (per Leeming JA and Griffiths AJA) as a recent example of the application of this principle. In addition no error arises where a submission was not made in a way that called for reasoned consideration, see Housing Commission of New South Wales v Tatmar Pastoral Co Pty Ltd [1983] 3 NSWLR 378 at 385-386.

56. As summarised above in [24] the EPA submitted that while a party is bound by the way they conduct a case there is discretion on appeal to allow an appellant to argue a new issue if considered expedient and in the interests of justice to do so citing Comcare and Peacock. Without determining finally whether such a discretion exists, I would decline to exercise it to allow the EPA to argue this new ground in this appeal as I do not consider that it is expedient to do so and it is certainly not in the interests of justice in terms of being fair to all parties.

57. The EPA submitted in this appeal that the AC may have been addressing as a fact whether asbestos was present. The fact of asbestos being planted on the Respondent’s land in 2016 was not the EPA’s case nor the Respondent’s case during the Class 1 hearing as is clear from the transcript extracts above in [13] (EPA at Tcpt 13 June 2023 p 49(16)-(17), Respondent at Tcpt 13 June 2023 p 59(13)-(42)). As this was clearly not pressed by either party upon reviewing the transcript, no basis to consider [108] of Crush and Haul (class 1) in that light exists. That circumstance underpins the Respondent’s submissions in [33]-[35] above, in criticising the EPA for stating that the AC failed to take into account the unfounded criticism of Mr Cauchi. The AC did not have to resolve the factual question underpinning that submission and it cannot be a basis for criticism in this appeal. The AC could reasonably conclude that Ex 5 was irrelevant to her decision given that she was not resolving what occurred in 2016.

58. In relation to the Respondent’s seven points of argument, point 1 (impermissible new contention) (see above in [33]), point 2 (no determination of Mr Cauchi allegation in Class 1 hearing and cannot be raised in this appeal) (see above in [36]), point 3 (no amendment of EPA’s pleading to incorporate issue) (see above in [39]) are accepted. Point 5 (evidence not critical) (see above in [41]) and point 6 (high threshold to establish unreasonableness in legal sense) (see above in [42]) do not arise as there was no failure by the AC to consider any relevant matter. Point 7 (see above in [43]) does not strictly arise as it concerns whether any error of law if established would have vitiated the decision. Had any error been found I do not consider the EPA established this was material applying the High Court in Nathanson at [1] (Kiefel CJ, Keane and Gleeson JJ). Their Honours held that materiality of an error of law is established ‘if the error deprived the appellant of a realistic possibility of a different outcome’, citing Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at [45]; MZAPC v Minister for Immigration and Border Protection (2021) 390 ALR 590; [2021] HCA 17 (MZAPC) at 592, 610. No such error would have arisen here.

59. Crush and Haul (class 1) at [108] reflects events at the Class 1 hearing and is entirely adequate reasoning in the circumstances of that proceeding. The paragraph shows thorough reasoning in briefly referring to a matter that was raised and went nowhere.

60. My finding above means that this ground alleging irrational, illogical or unreasonable decision-making by the AC cannot be sustained. No material error of law has been established. The EPA is unsuccessful on Ground 4.

Ground 2: failure to consider the findings in Crush and Haul (criminal)

62. Ground 2 in the Amended Summons Commencing Appeal states:

2. The Acting Commissioner failed to consider relevant material which was central to the task of determining whether Crush and Haul is a fit and proper person to hold an EPL, namely:

a. the finding made by Preston CJ in Environment Protection Authority v Crush and Haul Pty Ltd [2022] NSWLEC 113 [(Crush and Haul (criminal))] that Crush and Haul committed an offence contrary [to] section 48 of the POEO Act recklessly; and

b. the rejection by Preston CJ of evidence given by the director of Crush and Haul, Luke Cauchi, in that proceeding;

c. the finding by Preston CJ that the offending conduct “was contrary to the legislative objective expressed in the offence under s 48(2) of the POEO Act, impeded the achievement of the objects of the POEO Act and undermined the integrity of the regulatory scheme”;

d. the finding by Preston CJ that Crush and Haul (with Mr Luke Cauchi's knowledge) had, in connection with a previous application for an EPL, taken steps to conceal and avoid the regulator becoming aware of its involvement at the quarry; and

e. the change in circumstances of Crush and Haul since the decision of Preston CJ, namely the reappointment of Mr Luke Cauchi as the sole director of Crush and Haul in circumstances where Preston CJ had placed weight on Mr Cauchi's prior resignation from that position.

63. The EPA submitted that Grounds 2(a)-(c) and (e) concern subss s 83(2)(a)-(c), (f)-(g) of the POEO Act. Ground 2(d) concerns subss 83(2)(c)-(d). Ground 2 alleges legal unreasonableness which includes failure to consider claims and material, making of illogical or irrational findings and failure to give adequate weight to relevant factors of significance. Ground 2 effectively overlaps with Ground 3.

Extracts of AC’s judgment relevant to Grounds 2 and 3

64. Sections of the AC’s judgment relevant to Grounds 2 and 3 in Crush and Haul (class 1) are extracted as follows [I have annotated the extract to indicate the ground upon which each paragraph is relied]:

3. Relevant history of environmental non-compliance

…

3(a): The applicant

[11] The applicant was found guilty of breaching s 48(2) of the POEO Act by Preston CJ in the decision of Environment Protection Authority v Crush & Haul Pty Ltd; Environment Protection Authority v Cauchi [2022] NSWLEC 113 (EPA v C&H; EPA v Cauchi). The applicant was found at [4]-[5] to have:

“[4]…extracted, processed or stored more than 30,000 tonnes of extractive materials per year in 2018 at the Corindi Quarry. From 1 January 2018 to 31 December 2018, Crush and Haul sold 92,966.28 tonnes of extractive materials from Corindi Quarry.

[5] Crush and Haul was accordingly required to hold an environment protection licence to carry on the scheduled activity of land-based extractive activity at the premises of Corindi Quarry. Crush and Haul did not hold such a licence at the time that the activity was carried on. It thereby committed an offence against s 48(2) of the POEO Act.”

[Ground 2(a)] [12] Relevantly, the applicant was found by Preston CJ to have:

(1) committed the offence “recklessly”, stating at [81]-[82]:

“[81] In these circumstances, I find beyond reasonable doubt that Crush and Haul did commit the offence against s 48(2) of the POEO Act recklessly. Crush and Haul carried on the land-based extractive activity at Corindi Quarry with knowledge or foresight that the particular consequence or circumstance, that an environment protection licence was required for the premises by Crush and Haul extracting, processing or storing more than 30,000 tonnes per annum, was likely to result…

I find Crush and Haul did have this knowledge or foresight of the likelihood of the consequence or circumstance, that the 30,000 tonnes threshold would be exceeded triggering the need to obtain an environment protection licence, occurring.”

(2) not have caused any environmental harm, stating, at [13]:

“[13]…Crush and Haul’s carrying on of the scheduled activity of land‑based extractive activity without holding an environment protection licence did not cause any actual harm to the environment.”

(3) committed an offence against s 48(2) of the POEO Act of “low to medium objective seriousness” at [90].

…

3(b): Mr Luke Cauchi

[16] Mr Luke Cauchi is the current and only director of the applicant. Mr Luke Cauchi was relevantly convicted of an offence against s 169A(2) of the POEO Act in connection with the offence committed by the applicant discussed above in section 3(a) of this judgment. Preston CJ relevantly stated at [7]:

“[7] In the circumstances where Crush and Haul committed an offence against s 48(2) of the POEO Act (which is defined as an executive liability offence in s 169A(1) of the POEO Act), Mr Cauchi was a director of Crush and Haul and Mr Cauchi knew or ought reasonably to have known that the executive liability offence would be or was being committed and failed to take all reasonable steps to prevent or stop the commission of that offence, Mr Cauchi himself committed an offence against s169A(2) of the POEO Act.”

[Ground 2(b)] [17] His Honour went on to state at [62] and [66]:

“[62] I do not accept Mr Cauchi’s assertion of his belief that Crush and Haul would not and did not exceed the 30,000 tonnes threshold during 2018…

…

[66] I also do not accept Mr Cauchi’s assertion that he believed Crush and Haul could keep quarrying in excess of 30,000 tonnes once an application for an environment protection licence had been lodged with the EPA, regardless of whether an environment protection licence was actually granted by the EPA…”

[18] However, unlike the applicant, his Honour held at [128] that the “EPA has not established beyond reasonable doubt that Mr Cauchi committed the offence against s 169A(2) of the POEO Act recklessly.”

[19] In relation to environmental harm, his Honour stated at [131] that the “EPA did not contend that Mr Cauchi’s commission of the offence against s 169A(2) of the POEO Act caused actual environmental harm, that there was foreseeability of environmental harm, or that there were practical measures that might have been taken to prevent, control, abate or mitigate any environmental harm”.

[20] His Honour found the offence against s 169A(2) of the POEO Act committed by Mr Luke Cauchi was “of low objective seriousness” at [133].

…

5. Consideration of meaning and scope of term “fit and proper person” under the Protection of the Environment Operations Act

…

[Ground 2(c)] [64] However, the objects of the POEO Act include (at s 3(a)), “to protect, restore and enhance the quality of the environment”. The licensing regime set out in Chapter 3 of the POEO Act seeks to regulate scheduled activities which “are by their nature activities that are either inherently or when conducted in a certain manner or extent likely to cause harm to the environment” (EPA v C&H; EPA v Cauchi at [16]). I therefore agree with the respondent’s submission that in order to grant a Licence to the applicant in this matter, I must be satisfied that the applicant is a “fit and proper person” for the purposes of s 45(f) of the POEO Act.

6. Consideration of whether the applicant is a “fit and proper person” under the Protection of the Environment Operations Act

…

Section 83(2)(a) “That the person has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation”

…

[68] As set out above, the applicant was found guilty of breaching s 48(2) of the POEO Act by Preston CJ in the decision of EPA v C&H; EPA v Cauchi. The offence was found to be of “low to medium objective seriousness” (at [90]).

[69] The applicant’s conviction for a breach of s 48(2) of the POEO Act is a matter which I have considered in determining whether the applicant is a fit and proper person to be granted the Licence sought in this matter.

[Ground 2(a)] [70] I note that the applicant’s conviction under s 48(2) of the POEO Act was not trivial and was found by Preston CJ to have been carried out recklessly. However, I do not consider that one conviction, which did not result in environmental harm and which was found to be of low to medium objective seriousness, is determinative, on its own, that a person is not a “fit and proper” person to hold a Licence under the POEO Act.

…

Section 83(2)(b) “that, if the person is a corporation, a current or former director of the corporation or of a related body corporate – (i) has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation”

Current director

[73] Mr Luke Cauchi is the current and only director of the applicant. As set out above, at [16]-[21] of this judgment, Mr Luke Cauchi was relevantly convicted of an offence against s 169A(2) of the POEO Act in connection with the offence committed by the applicant under s 48(2) of the POEO Act considered above in relation to s 83(2)(a) (see EPA v C&H; EPA v Cauchi).

[Ground 2(b)] [74] His Honour relevantly stated at [62] and [66] that:

“[62] I do not accept Mr Cauchi’s assertion of his belief that Crush and Haul would not and did not exceed the 30,000 tonnes threshold during 2018. Mr Cauchi knew that Crush and Haul was obliged under the sub management agreement to ensure continuous productivity of the quarry and a bare minimum of 30,000 tonnes per annum out the gate…

…

[63] I also do not accept Mr Cauchi’s assertion that he believed Crush and Haul could keep quarrying in excess of 30,000 tonnes once an application for an environment protection licence had been lodged with the EPA, regardless of whether an environment protection license was actually granted by the EPA...”

[75] However, his Honour found the offence against s 169A(2) of the POEO Act committed by Mr Luke Cauchi was “of low objective seriousness” (EPA v C&H; EPA v Cauchi at [133]).

[76] Noting that the offence for which Mr Luke Cauchi was convicted related to the same conduct for which the applicant was convicted, in EPA v C&H; EPA v Cauchi, I similarly do not consider that Mr Luke Cauchi’s single conviction, which did not result in environmental harm and which was found to be of low objective seriousness, is determinative of the applicant, through Mr Luke Cauchi as its sole director, not being a “fit and proper” person to hold a Licence under the POEO Act.

[Ground 3] [77] This is particularly in circumstances where Mr Cauchi has no other convictions for environmental offences (Affidavit, Luke Cauchi, 24 April 2023, par 28), has expressed shame and embarrassment in relation to the 2022 convictions (Affidavit, Luke Cauchi, 24 April 2023, par 34), has educated, and is continuing to educate himself on his responsibilities as a director (Affidavit, Luke Cauchi, 24 April 2023, pars 36-38, 52-53, 68), and has committed to environmental compliance in the future (Affidavit, Luke Cauchi, 8 June 2023, pars 6 and 9).

…

[Ground 3] Former director – Mrs Louise Cauchi

…

Other matters

…

[94] In my consideration of s 83(2) and the numerous references to a “former director”, and noting that s 83 is a non-exhaustive and non-binding list of matters for consideration, I agree with the applicant’s submission that the weight to be placed on a former director’s history of contraventions with environment protection licence should be considered in the context of their present and future influence or control over the conduct of the applicant company seeking to obtain a Licence.

[95] The facts of this case are that Mrs Louise Cauchi only ceased to be a director of the applicant company in January 2023, is a 100% shareholder of the applicant, and the current sole director’s mother. These facts must be considered in the context of Mrs Louise Cauchi’s history of environmental non compliances and the findings made by Preston CJ in EPA v C&H; EPA v Cauchi at [106] that:

“[106] I accept that there is a risk that Crush and Haul might reoffend whilst Mrs Cauchi is the sole director of Crush and Haul. Her record as a director of companies that breach the POEO Act is not a good one. Nevertheless, lessons can be learnt even if belatedly. I consider that in circumstances where Mrs Cauchi is the director of Crush and Haul there is a need for the sentence imposed on Crush and Haul for its offence to reflect specific deterrence. If this is done, Crush and Haul is less likely to reoffend.”

[96] The respondent submitted (in its written submissions at par 61) that “the “undertakings” which Crush and Haul claims Mr Cauchi and Mrs Cauchi have provided to the Court do not advance matters, given their continued pattern of breaching environment protection legislation, their convictions and their non-compliance with orders made by this Court (cf ASFC Part B [1(b5)]-[1(b7)] sic).”

[97] The fact that Mrs Louise Cauchi has provided an undertaking to the Court dated 13 June 2023 (Ex G) suggests that the applicant acknowledges that Mrs Cauchi’s environmental compliance history may present an issue in the applicant obtaining a Licence. I consider that Mrs Louise Cauchi’s control over the current or future conduct of the applicant company is a matter of relevance in the determination of whether the applicant should be granted a Licence under the POEO Act.

[98] The applicant argued in its written submissions that Mrs Louise Cauchi at par 72 “no longer has control of the operations of the company” and at par 74 “will have no involvement in the operational management of the applicant”. The applicant’s submissions go on to state at par 75 that:

“The Court also has evidence before it that both Mrs Louise Cauchi and Mr Joe Cauchi no longer have direct or indirect control of the operational management of the applicant. The court can be comfortably satisfied that this is the case having regard to:

(a) the personal circumstances or Mr and Mrs Cauchi (in particular the terminal health of Mr Joseph Cauchi, that they are now residing overseas; and their age) (Affidavit, Luke Cauchi, 24 April 2023 at par 8);

(b) the written undertaking, dated 23 April 2013, provided by Mrs Louise Cauchi to the Court (Affidavit, Luke Cauchi, 24 April 2023 at par 48 and Exhibit LJC-2, Tab 3);

(c) the evidence of Mr Luke Cauchi that it is time for generational change and providing undertakings to the Court and confirming that the applicant is willing to accept a condition restricting the involvement of Mr and Mrs Cauchi in the operational management of the Applicant (Affidavit, Luke Cauchi, 24 April 2023 at par 39 and 41-42); and

(d) the applicant’s proposed condition A4.1 below.”

[99] In relation to the concept of control, the respondent’s primary argument appeared to be that this matter concerned a “family group of companies” (Tcpt, 14 June 2023, p 10 (20)-(23)) and “this family group has a history of offending under the legislation” (Tcpt, 14 June 2023, p 11, (16)-(17)).

[100] However, the respondent did not provide any evidence that Mrs Louise Cauchi was presently controlling, or would control in the future, the conduct of the applicant company.

[101] As stated above, Mrs Louise Cauchi provided an undertaking to the Court on 13 June 2023 which relevantly stated:

“I undertake to the Land and Environment Court of New South Wales:

…

Likelihood of reoffending

[139] Mr Cauchi resigned as a director of Crush and Haul in February 2022 and now runs a different business in the civil and transport industry in the Sydney region. The EPA accepted that Mr Cauchi is unlikely to reoffend.

[140] In circumstances where Mr Cauchi has insight into his offending in this case, is genuinely remorseful for offending and has changed his business, I find that he is unlikely to reoffend.

…

143. How the EPA presented its case before AC must be considered. The Respondent in its Amended SOFAC extracted above in [67] identified that Mr Cauchi had been reappointed director of the Respondent and that was also clear from the transcript before the AC, extracted above in [65]-[66]. The EPA in its Amended SOFAC in Reply in Pt A ‘Facts’ par 22A and Pt B ‘Contentions’ par 7(b)(ii) extracted above in [68] referred to Crush and Haul (criminal) at [139] to provide context for why the EPA accepted that the Respondent was unlikely to reoffend in the criminal proceedings, as Mr Cauchi had left the quarrying business.

144. The EPA in its written submissions before the AC submitted that the finding in Crush and Haul (criminal) at [103] that the Respondent should be less likely to offend was premised on Mr Cauchi no longer being a director of the Respondent, and identified that Mr Cauchi was presently the director of the Respondent.

145. Mr Cauchi was examined in chief by the Respondent’s counsel and cross-examined by the EPA’s counsel on his reappointment as director of the Respondent (see above in [65]). The counsel of the Respondent and the EPA respectively made submissions on Crush and Haul (criminal) at [139] (see above in [65], [66]).

146. The AC’s judgment makes no reference to the finding of Mr Cauchi’s unlikelihood of reoffending in Crush and Haul (criminal) at [139], [140]. The AC discusses at [95] Mrs Cauchi’s likelihood of reoffending. The AC had regard at [125] to Mr Cauchi being the sole director of the Respondent.

147. To the extent the EPA now pursues a different case to that before the AC as the Respondent submits, that approach is impermissible, see above in [56].

148. I do not exercise any discretion I may have to allow matters not put before the AC to be considered in this appeal as it is not expedient to do so and is not in the interests of justice for all parties.

149. I have not found any error of law established in relation to the five particulars alleged. If I had I would have considered that any error was not material, as identified in Nathanson at [1]. The EPA is unsuccessful on Ground 2(e).

150. The EPA is unsuccessful on Ground 2.

Ground 3: failure to give proper weight to the findings of Crush and Haul (criminal)

151. The Amended Summons Commencing Appeal identified the following appeal ground:

3. The weight given by the Acting Commissioner to Preston CJ having convicted Crush and Haul and Luke Cauchi of offence contrary to section 48 of the POEO Act, and to the reasons given by Preston CJ in that decision, was so inadequate as to the result in a legally unreasonable decision (at [67]-[78]).

152. The EPA submitted that Ground 3 alleges legal unreasonableness that includes failure to consider claims and material, making of illogical/ irrational findings and failure to give adequate weight to relevant factors of significance. This appears to overlap with Ground 2.

EPA’s submissions

153. It is also apparent that the AC minimised the significance of the earlier convictions and their relevance to the question of fitness and propriety at [70], [76], [147], [151] and placed undue weight on the absence of further convictions and the effluxion of time at [77], [127]-[128], [130]-[131], [178]. For example, on two occasions at [70], [147], the AC ‘note[d]’ that the Respondent had been found to be a reckless offender, but then downplayed its significance by observing that it was only one conviction which did not result in actual environmental damage and that it would not, itself, lead to the conclusion that the Respondent was not a fit and proper person to hold an EPL. The error in the AC's approach was to place so little weight on the convictions of the Respondent and Mr Cauchi so as to result in a legally unreasonable decision. That error was compounded by the errors in Grounds 1, 2 and 4 and the unfounded weight placed on Mr Cauchi's testimony at [77], [103]-[109], [149]-[150].

154. The convictions and conduct considered by Preston CJ represented the most recent and serious conduct of both the Respondent and Mr Cauchi, being conduct contrary to the very Act under which the Respondent had made its application for an EPL. The convictions furthermore concerned conduct directly relevant to the type of application before the AC, that is, they arose from contraventions of the EPL regime, in circumstances where the Respondent had sought to conceal from the EPA the fact of its involvement at the quarry. The fact that the Respondent and its then (and now current) sole director had previously been found to contravene the POEO Act, to have done so recklessly (in the case of the company), and to have taken steps to conceal their involvement in connection with a prior application for an EPL, ought to have been given substantial weight. The AC's failure to do so was legally unreasonable.

155. It has long been held that, where, as here, there has been a failure by a decision-maker to give adequate weight to relevant factors of great importance (such as the judgment of Preston CJ), a decision may be set aside on the basis that it is unreasonable (being an error of law): Peko-Wallsend at 30, 41, 71, Li at [72]. That such an error was made here is apparent from the reasons of the AC, in the context of the submissions and material placed before her, and does not require devolving into a review of the decision on its merits. The fact that s 83 of the POEO Act does not itself dictate how the various factors are to be weighed does not prevent a finding that there has, in the circumstances, been a legally unreasonable decision.

Respondent’s submissions

156. A complaint about the weight afforded to permissible considerations does not amount to an error of law: Liverpool City Council v Moorebank Recyclers Pty Ltd [2018] NSWCA 7 at [133] citing Peko-Wallsend at 40-41 (Mason J) and Attorney General (NSW) v X (2000) 49 NSWLR 653; [2000] NSWCA 199 at [120]-[122], Wattie v Industrial Relations Secretary on behalf of the Secretary of the Department of Justice (No 2) [2018] NSWCA 124 at [173]. Even in the judicial review context, a court ‘should proceed with caution when reviewing an administrative decision on the ground that it does not give proper weight to relevant factors, lest it exceed its supervisory role by reviewing the decision on its merits’: Peko-Wallsend at 42 (Mason J).

157. The matters set out in s 83 are discretionary with no stipulation as to the weight of any such discretionary matter, with the exception of s 83(4) which permits certain matters to be disregarded. Accordingly, the weight to be given to other findings of Preston CJ (which the EPA complains were given undue weight) was a matter for the AC. Those matters were permissible relevant matters for the AC to take into consideration in the exercise of her discretion in determining whether to grant an EPL.

158. Put simply, the weight to be afforded to the various considerations was a matter for the AC alone to determine, and no error (let alone error of law) has been demonstrated in the careful and considered fashion she dealt with the earlier findings made by Preston CJ.

159. The EPA otherwise seeks to refer to a limited set of other evidence which it says was given undue weight (i.e. the absence of further convictions and the effluxion of time) to suggest that there was legal unreasonableness. Notably, the EPA fails to refer to a suite of evidence in the affidavits of Mr Cauchi which were before the AC as to conduct and relevant matters after the decision of Preston CJ. In particular it is evident that the AC considered the matters set out in the following paragraphs as highly relevant: [77], [94]-[113], [144], [149].

160. To the extent that the EPA’s submission above in [154] relies upon an allegation that the Respondent has sought to conceal from the EPA the fact of its involvement at the quarry in support of Ground 3 and the suggestion of a legally unreasonable decision, that matter would be disregarded for the reasons given above in respect of Ground 2(d).

No failure to attribute proper weight

161. Section 83 of the POEO Act identifies matters which may be considered in determining whether a person is fit and proper. As agreed by the parties no ‘hierarchy’ for the consideration of these matters is specified in that section. In other words the matter of weight to be attributed to them lies with the AC under the statutory scheme in the POEO Act. In the absence of any statutory indication of the weight to be given to various considerations, an allegation that insufficient weight was given to particular evidence is generally insufficient as a ground of appeal: Hoy at [8] citing Peko-Wallsend at 41, Terrace Tower Holdings Pty Ltd v Sutherland Shire Council [2003] NSWCA 289; (2003) 129 LGERA 195 at [57], Hoskins v Waverley Council [1999] NSWLEC 236 at [11]‑[12].

162. The EPA’s submissions are a complaint about the merits of the AC’s consideration of s 83 factors, for example ‘ought to have been given substantial weight’ is an impermissible submission about the merits of the AC’s finding. I agree with the Respondent that Crush and Haul (class 1) shows a careful and balanced consideration of matters.

163. As already considered above in [117], an impermissible fine-toothcomb approach is evident in the EPA’s focus on the AC’s use of the word ‘noted’ on two occasions.

164. The AC’s judgment must be read fairly as a whole. As already considered exhaustively in Ground 2 the AC’s consideration of Crush and Haul (criminal) was substantial and there is express reference to it in numerous paragraphs demonstrating extensive consideration of it.

165. Even if authorities such as Peko-Wallsend and Li could apply, nothing in the AC’s judgment suggests this aspect of these authorities is called up here. No matter of ‘great importance’ has been identified by the EPA.

166. The EPA is unsuccessful on Ground 3.

Ground 1: failure to apply correct statutory test

167. Ground 1 raises the question whether the AC applied the correct legal test established by s 45(f) and s 83(2) of the POEO Act to determine if the Respondent is a fit and proper person.

168. The Amended Summons Commencing Appeal identified the following appeal ground:

1. In deciding whether the respondent (Crush and Haul) is “a fit and proper person” within the meaning of section 45(f) of the Protection of the Environment Operations Act 1991 (NSW) (POEO Act), the Acting Commissioner did not apply the correct test, in that, instead of asking whether she was satisfied that Crush and Haul is a fit and proper person to hold an environment protection licence (EPL), she asked herself whether certain of the matters on which the appellant relied meant that Crush and Haul is not a fit and proper person (at [76], [123], [128], [131], [145]-[147], [151]-[153]).

169. The EPA submits that the AC incorrectly inverted the test by not using positive language in considering Mr Cauchi’s character. The parties agreed that the AC correctly accepted that she was required to reach a state of actual satisfaction that the Respondent was a fit and proper person at [64] in order to be satisfied that it should be granted an EPL.

170. Some of the numerous paragraphs of the judgment referred to by the parties have been extracted and marked to identify where it is said that the legal test has been framed positively and negatively according to the parties:

1. Introduction

[POSITIVE] [7] The parties agreed that the sole matter in dispute in this case was whether the applicant is a “fit and proper person” under s 45(f) of the POEO Act to hold the Licence applied for.

…

4. Statutory Framework

…

[POSITIVE] [49] A critical issue in this matter is whether the applicant is a “fit and proper person” for the purpose of s 45(f) of the POEO Act. The “Note” to s 45(f) relevantly states “see section 83 for provisions relating to the determination of whether a person is a fit and proper person for the purposes of this section”. Section 83 of the POEO Act provides:

…

5. Consideration of meaning and scope of term “fit and proper person” under the Protection of the Environment Operation Act

…

[POSITIVE] [63] In relation to the respondent’s argument that I must reach a state of actual persuasion and satisfaction that the applicant is a fit and proper person in accordance with the principles set out in Makasa, I note that Makasa was considering a different legislative regime with different language to that in s 45 of the POEO Act. I agree with the applicant’s submission that the statutory regime being considered in Makasa imposed an onus to satisfy the Minister of the character test whereas s 45 of the POEO Act requires consideration of various factors as are of relevance (which includes whether the applicant is a fit and proper person).

[POSITIVE] [64] However, the objects of the POEO Act include (at s 3(a)), “to protect, restore and enhance the quality of the environment”. The licensing regime set out in Chapter 3 of the POEO Act seeks to regulate scheduled activities which “are by their nature activities that are either inherently or when conducted in a certain manner or extent likely to cause harm to the environment” (EPA v C&H; EPA v Cauchi at [16]). I therefore agree with the respondent’s submission that in order to grant a Licence to the applicant in this matter, I must be satisfied that the applicant is a “fit and proper person” for the purposes of s 45(f) of the POEO Act.

6. Consideration of whether the applicant is a “fit and proper person” under the Protection of the Environment Operations Act

…

Section 83(2)(a) “That the person has contravened any of the environment protection legislation or other relevant legislation, or has held a licence or other authority that has been suspended or revoked under any of the environment protection legislation or other relevant legislation”

…

[POSITIVE] [69] The applicant’s conviction for a breach of s 48(2) of the POEO Act is a matter which I have considered in determining whether the applicant is a fit and proper person to be granted the Licence sought in this matter.

[NEGATIVE] [70] I note that the applicant’s conviction under s 48(2) of the POEO Act was not trivial and was found by Preston CJ to have been carried out recklessly. However, I do not consider that one conviction, which did not result in environmental harm and which was found to be of low to medium objective seriousness, is determinative, on its own, that a person is not a “fit and proper” person to hold a Licence under the POEO Act.

…

7. Decision regarding whether the applicant is a “fit and proper person”

[POSITIVE] [177] Having regard to the above consideration, I find that the applicant is a “fit and proper person” pursuant to ss 45(f) and 83 of the POEO Act in respect of the Licence sought to be obtained in this matter.

[178] My reasons for this determination are as set out above, but can be generally summarised as follows:

(1) the applicant has only one prior conviction under s 48(2) of the POEO Act where no environmental harm was caused and was deemed to be of low to medium objective seriousness (although it is noted that the offence was found by Preston CJ to have been carried out recklessly);

(2) the current sole director, Mr Luke Cauchi, has only one prior conviction, being an executive liability offence under s 169A(2) of the POEO Act connected to the offence for which the applicant was convicted as set out above. This offence was found by Preston CJ to not have been carried out recklessly and to be of low objective seriousness. His Honour similarly found the offence to have caused no environmental harm;

(3) I find Mr Luke Cauchi to be honest and genuine in his remorse for his and the applicant’s 2022 convictions;

(4) I have placed material weight on Mr Luke Cauchi’s evidence that he will have “sole control” of the applicant going forward, is aware of his obligations in the role of director, and wishes to move forward with a law abiding company;

(5) the former director, Mrs Louise Cauchi has a more concerning compliance history, however, is no longer a director of the applicant and there was no cogent evidence provided which refuted Mr Luke Cauchi’s affidavit evidence and testimony that he will be in control of the applicant and its activities going forward;

[NEGATIVE] (6) the respondent did not contend in the hearing that the activities sought to be licensed will not be managed and in the hands of a technically competent person. In the absence of any cogent evidence to the contrary, I have accepted that the activities sought to be licensed will be managed and in the hands of a technically competent and able person;

[NEGATIVE] (7) the respondent did not contend in the hearing that the applicant does not have the financial capacity to comply with the obligations proposed to be imposed under the licence. In the absence of any evidence to the contrary, I have accepted that the applicant has the financial capacity to comply with the obligations proposed to be imposed under the licence; and

(8) the applicant’s outstanding costs owed to the respondent are of little weight as the:

(a) 2016 costs were disputed by the applicant and not ultimately pursued by the respondent (on evidence before the Court); and

(b) outstanding costs from the EPA v Crush and Haul; EPA v Cauchi litigation is only six months old and there was undisputed evidence before the Court from Mr Luke Cauchi that these costs will be paid in the near future.

8. Other matters for consideration under s 45 of Protection of the Environment Operations Act

[POSITIVE] [179] On the basis that I have determined that the applicant is a “fit and proper person” for the purposes of s 45(f) of the POEO Act, it is necessary to consider the other relevant matters for consideration set out in s 45. As set out previously, in exercising its functions under the POEO Act, the appropriate regulatory authority (or in this case, the Court) is required to take into consideration such of the matters set out in s 45 as are of relevance.

…

Relevant objects of the Protection of the Environment Operations Act

…

[POSITIVE] [200] On the basis that I have determined that the applicant is a fit and proper person under s 45(f) of the POEO Act, and all other matters listed for consideration as are of relevance under s 45 of the POEO Act are not disputed by the parties, I do not consider the granting of the Licence to be contrary to any of the stated objectives in s 3 or inconsistent with any of the matters for consideration that are of relevance under s 45 of the POEO Act.

…

171. The parties referred to sections from the transcript of the Class 1 hearing on 13 June 2023 extracted below:

[p 7(44)-(49)]

BEASLEY: … Also para 17 is not read and to the extent that the facts and contentions in reply might refer to s 83(2)(m), that’s no longer relied on by the respondent, that subparagraph. I think that’s all the material for the respondent.

172. Sections from the transcript of the Class 1 hearing on 14 June 2023 referred to by the parties are extracted below:

[p 5(5)-(25)]

BEASLEY: Commissioner, I’ll come in a moment to what we say is a particular error in the applicant’s written submissions. There’s a theme in the applicant’s case and it’s almost along these lines. It’s as if there’s a notion that the EPA has some burden to satisfy you that the applicant is not a fit and proper person to be issued with an environmental protection licence. I can prove that and I’ll tell you why but that’s not the task I have or the EPA has and that’s not the determination you have to make.

In exercising your functions under what I’ll call the Operations Act, you have to determine whether the applicant is fit and proper. In other words, and I’ll come to cases on this, you have to be “actually persuaded” that they are fit and proper. You have to, in a legally permissible way, reach a state of satisfaction that the applicant is fit and proper to be issued with an EPL and, as I’ve said, and I’ll come to cases on this, that has to be within the bounds of legally reasonable decision making.

There was another theme in the applicant’s submissions which was along these lines, that what’s germane to sentencing considerations and principles for environmental offences is somehow directly applicable to the administrative law task that you have in determining whether the applicant is fit and proper to be issued with an EPL. That’s not correct. Your task is different.

EPA’s submissions

173. The EPA submitted that contrary to the test accepted by the AC at [64], the AC then approached her statutory task on the basis that, subject only to the EPA establishing to the contrary, she could assume (and therefore find) that the Respondent was a fit and proper person as illustrated at [147], [153] (see above in [170]). She did not require positive evidence to establish that fact. The AC concluded at [147] that the Respondent is a person of good repute because the conviction and penalty notices did not render the Respondent not being of good repute. No reference or finding was made as to other evidence demonstrating that the Respondent was, in fact, of good repute. Such an approach not only placed a burden of proof on the EPA but also inverted the statutory question posed by the POEO Act.

174. The same approach is evident in the AC's reasoning at [70], [76], [123]­[124], [128], [131]. This deficiency and inversion in reasoning is not cured by the fact that the AC elsewhere correctly expressed the statutory test at [64], [177], [179], [200] (see above in [170]). The ‘summary’ of findings as set out at [178] confirm that the AC (wrongly) focused on whether the EPA had negatived the assumption that the Respondent was a fit and proper person, rather than whether the Respondent had positively satisfied the AC that it was fit and proper (see above in [170]). This failure to apply the correct statutory test is a further error of law in the decision.

175. In reply submissions, the EPA pointed out the Respondent conceded the AC referred to the statutory test in negative terms. The AC was expressly cautioned against such an approach in the submission before her (see above in [172]). Contrary to the Respondent’s submission that the EPA has selected examples of the statutory test in negative terms, the EPA has identified passages in the dispositive reasoning applied before the AC excluding [177] (see above in [170]). At [177] the test is expressed in terms of a positive state of satisfaction. However, it is infected by the AC’s earlier, erroneous findings.

Respondent’s submissions

176. The Respondent rejected the assertion that the AC misapplied the statutory test, to the effect that notwithstanding the proper identification of the statutory task the AC proceeded to disregard that task. When regard is had to the reasons for decision as a whole it is evident that the AC understood that she was required to reach a positive state of satisfaction that the Respondent is a fit and proper person.

177. The Respondent’s position is that to the extent the AC referred to the test in a negative way, the examples relied upon by the EPA are not demonstrative of an incorrect legal test, but rather are just a selective trawling through the reasons of the AC with an eye focused upon asserting an error, and without regard to the context of the decision as a whole. That is an impermissible approach: Brimbella at 368, Wu Shan Liang at 291, Carstens at [76], Bonim at [6]-[7], Village McEvoy at [28]-[31] and Goreski at [53].

178. The test was identified in its positive form at [7], [49], [63], [64], [69], [71], [85], [103], [112], [176], [177], [179], [200]. Accordingly, this ground fails.

179. It is an overreach to suggest that two of the eight matters summarised at [178] is indicative of the AC being focused upon the wrong test. To the extent that the EPA submitted the AC was wrong at [178] to refer to the EPA having not contended at the hearing that the activities sought to be licensed would be managed by a technically competent person and that the Respondent did not contend that it had financial capacity, those matters should be understood in the context that they were initially raised and then expressly abandoned by the EPA above in [173]-[174].

No failure to apply correct statutory test

180. The parties agree the correct legal test was identified by the AC at [64], and elsewhere. Some of the paragraphs of the judgment referred to by the parties are extracted above to provide context for the parties’ submissions. The extract of the transcript in which the EPA’s counsel identified concern that the Respondent’s (then the Applicant) submissions incorrectly identified the test is also extracted above in [172]. This transcript demonstrates that the AC was alerted to this issue.

181. ‘Negative’ language according to the EPA appears at [70], [76], [123]-[124], [128], [131], [147], [151]-[153], [178] meaning paragraphs where the AC appeared to place an onus on the EPA to demonstrate a matter to apply to the consideration of s 83 rather than an onus falling on the Applicant to demonstrate a matter. I note that the language in [153] is in fact expressed positively. The EPA submitted these showed examples of dispositive reasoning. ‘Positive’ language appears at [7], [49], [63], [64], [69], [71], [85], [103], [112], [176], [177], [179], [200]. The AC’s conclusive paragraph at [177] is expressed in positive language. While two sub-paragraphs of [178] are criticised as containing negative language, the other six subsections are not criticised.

182. The judgment must be read fairly and as a whole and in light of the case presented to the AC. When all of the paragraphs relied on by the parties are considered in this light, no error is demonstrated. I agree with and adopt the Respondent’s submissions above in [177] referring to Brimbella, Wu Shan Liang, Carstens, Bonim, Village McEvoy and Goreski.

183. The Respondent’s submissions in [179] above concerning the unwarranted criticism of [178] of the AC’s judgment are accepted given the context identified. The summary paragraph in [178] of the judgment clearly show that the AC was aware of her task.

184. The EPA is unsuccessful on Ground 1.

185. As the EPA is unsuccessful on all grounds the s 56A appeal will be dismissed.

Costs

186. The usual approach in s 56A appeals under the LEC Act is that costs follow the event. The EPA has been unsuccessful and it should pay the costs of the Respondent.

Orders

187. The Court orders:

1. Appeal no. 2023/260897 is dismissed.

2. The Appellant is to pay the Respondent’s costs of the appeal as agreed or assessed.

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Decision last updated: 12 March 2024