Grafil Pty Ltd v Environment Protection Authority; Mackenzie v Environment Protection Authority

[2020] HCATrans 17

[2020] HCATrans 017

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney   No S260 of 2019

B e t w e e n -

GRAFIL PTY LTD

Applicant

and

ENVIRONMENT PROTECTION AUTHORITY

Respondent

Office of the Registry
  Sydney   No S261 of 2019

B e t w e e n -

ROBERT MACKENZIE

Applicant

and

ENVIRONMENT PROTECTION AUTHORITY

Respondent

Applications for special leave to appeal

KEANE J
NETTLE J
GORDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 FEBRUARY 2020, AT 10.09 AM

Copyright in the High Court of Australia

____________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friends, MR T.G. HOWARD, SC and MR C.R. IRELAND, for the applicants.  (instructed by Johnson Winter & Slattery)

MS A.M. MITCHELMORE, SC:   If the Court pleases, I appear with my learned friend, MR P.J. ENGLISH, for the respondent.  (instructed by Environmental Protection Authority - Legal Services Branch)

MR WALKER:   Your Honours, there can be, in light of express legislative statement to this effect, no doubt about the public importance of the encouragement of the reuse and recycling of materials produced as a result of ordinary commerce and manufacturing.  There can be no doubt in particular by reason of the unusual and emphatic statement of that matter that you will find by the embedded reference commencing on page 427 of the second volume of the application book. 

I say it is an embedded reference because the objects of the Act, the provisions of which were in question - section 144 and the definition of “waste” – include in section 3 not only the reference in subparagraph (d)(iii) to the promotion of the “re‑use, recovery or recycling of materials”, but also in paragraph (g) at the foot of page 427, assistance, that is, promoting the assistance in the “achievement of the objectives of the Waste Avoidance and Resource Recovery Act”, which we have set out at page 425 of the book. 

One will see there that starting with what might be called the headline reference to ecologically sustainable development, Parliament in particular specifies in subparagraph 3(b)(ii) of the objects of that Act, these being explicitly incorporated by reference in section 3 of the relevant Act to what is called:

resource recovery (including reuse, reprocessing, recycling and energy recovery) -

So the public importance of the understanding given by a court to provisions which regulate, including by criminal sanction, conduct in what I will call the recycling sector, cannot really be overstated.  We then come to the provisions which we say display both a very clear failure of purposiveness against that background as well as demonstrating a striking example of the general being permitted to derogate from the special.  So at page 431 you will find it. 

The definition of “waste” has items lettered (a), (b), (c), (d) and (e) about which two things can be said that we think the Court of Criminal Appeal regards as being against us.  Only one of them really might be.  The first thing is the items (a) through (e) are all separated by the word “or”, giving rise to one of the possible literal understandings that satisfying any one of those will suffice, a box‑ticking approach, and if any one of those is satisfied then the meaning or import of any of the others is of no moment. 

We challenge that and say that that has the effect, for reasons I am about to come to, of having the general, for example, paragraph (a), totally swallow up and render otiose, a complete waste of legislative attention, specific provisions such as (d).  The second point which was wrongly regarded as being against us in the Court of Criminal Appeal is what is called in the jargon of the reasons “the last sentence”:

A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re‑used or recovered -

amended so as to take out “is or” and left with “may be”.  So the prospect is the form of the provision that matters for us.  Now, it is clear, in our submission, that the relation between that last sentence which picks out a sole criterion of the prospect of processing, recycling, reuse or recovery, that is, the capacity so to be dealt with, obviously draws attention to (d) which is that item which refers to just that kind of material and says of that kind of material that it will be waste – it will be within the definition of “waste” only in specified circumstances. 

Your Honours are familiar with the fact that those specified circumstances are intended by the Act to be prescribed and that they were prescribed in this case in terms which can be briefly dealt with.  It cannot be used as fuel without thereby becoming waste and it cannot be applied to land in various specified ways without also becoming waste.  By contrast, the material in question in this case was intended to be used as incorporated road base in a way which obviously did not amount to being used as fuel and did not amount to being applied in what I will call a proscribed fashion. 

So the question arose if, by dint of that satisfaction of legislated and delegated legislation indicating how this material was to be treated so far as its character as waste would be concerned, if that was satisfied fully within the four walls of paragraph (d), could that be rendered an otiose exercise totally beside the point carrying out no purpose as legislated because the general terms of, say, paragraph (a) would of course, as one might expect with anything that would fit within the ordinary contextual meaning of the word “waste” also be satisfied, because your Honours will have noted - and this is a reason, with respect, to favour the purposive approach for which we contended successfully at first instance and failing in the Court of Criminal Appeal - your Honours will have noted that this is a definition which is not exhaustive.  It is not a means definition.  It is an includes definition.  So ordinary contextual meaning is important.

Ordinary contextual meaning of course contemplates that recycled waste is waste - that is ordinary English and it makes sense - that reused materials not wanted would be, but for reuse, waste.  The question of course as to whether it should continue to have that identity as a matter of public policy sanctioned by criminal regulation is obviously one that has the general public importance to which I referred in opening. 

The particular black letter question is whether the Court of Criminal Appeal has gone wrong by giving an anti‑purposive, literally possible but not literally exclusive, meaning to the expression “or” and in particular whether there has been a very important failure to appreciate that unless operation is given to provisions which specifically deal with this favoured subclass of materials that may be recycled, et cetera, then there will not possibly be an achievement through these provisions of one of the emphatically specified objects.  It is for those reasons that we call in aid not only the preferable way contextually to read the linking conjunction “or”, but also the level of generality which is so various between paragraph (a), say, and paragraph (d) specifically. 

Your Honours, that is, in our submission, a point which, if we are correct, if there are sufficient prospects of succeeding in our argument, display the Court of Criminal Appeal as having gone off the rails in two important respects.  It would be ridiculous for me to propose to your Honours that this is a case for the Court to reconsider how to construe statutes.  That would be absurd.  But within the supervisory function of the Court through the filter of special leave, with respect, there ought to be cases from time to time where there have been serious departures from established principle, not just in the correctional sense so far as the general jurisprudence is concerned. 

We do not suggest that the jurisprudence on statutory interpretation as a method would be affected by the outcome one way or the other in this

case but it would be, in our submission, important, particularly in criminal jurisdiction, that a statute has been construed in accordance with the proper method so as to produce the correct result. 

We have, with respect, the advantage of having succeeded at first instance on these arguments and, in our submission, the odd exercise whereby paragraph (d) becomes a non‑contributor to the ecological endeavour referred to in section 3 objects, in our submission, highlights the significance of the issues which we seek to raise and which we say are deserving of special leave.  May it please the Court.

KEANE J:   Thank you, Mr Walker.  Yes, Ms Mitchelmore.

MS MITCHELMORE:   Your Honours, in our submission, the decision of the Court of Criminal Appeal is not attended by sufficient doubt to warrant the grant of special leave and my friend’s emphasis on purpose proceeds on a premise that the Court of Criminal Appeal’s construction does not achieve a purpose that is consistent with objects such as encouraging recycling. 

Your Honours will note, looking at page four hundred and – submission of the objects – I think my friend went to page 427 of volume 2 of the application book that reference is made – the emphasis was given to point (iii):

the reduction in the use of materials and the re‑use, recovery or recycling –

and assisting:

in the achievement of the objectives of the Waste Avoidance and Resource Recovery Act –

But your Honours will also see that the chapeau to paragraph (d) is the object of reducing risks to human health and preventing degradation of the environment by use of mechanisms that promote, inter alia, the elimination of harmful wastes, and there is a premise in my friend’s argument that substances that are reused, recycled, processed, are not harmful. 

In my submission, the way that the Court of Criminal Appeal has construed the definition of “waste” gives effect to or recognises that, notwithstanding that there are substances that might have been processed, reused, recycled, that they will nonetheless potentially be harmful to the environment and need to be regulated and it is, in my submission, consistent with the regulatory objects of the Protection of the Environment Operations Act that the Court of Criminal Appeal has construed the provision in the way that it has.

Your Honours also have to take into account the overall regulatory scheme, in my submission, of the Act.  The definition of “waste” is but one part but there is also a scheme, as the Court of Criminal Appeal worked through, in dealing with questions that are the subject of a special leave application to particular exemptions that can be granted under the regulations and which can apply and did apply in this case although of course the Court of Criminal Appeal held, contrary to the trial judge, that it was for the applicants to establish that they complied with those exemptions in order to get the benefit of an exemption from having to be licensed. 

So, properly understood, in my submission, having regard to the overall scheme of regulation of waste under the Act, the Court of Criminal Appeal’s construction is not anti‑purpose and in fact is consistent.  If one looks at the definition of “waste” which my friend went to at page 431 of the application book and, in particular, paragraph (d), your Honours will see that it is dealing with a particular category of:

processed, recycled, re‑used or recovered substance produced wholly or partly from waste –

and it is a substance of that nature that is applied to land or used as fuel.  The legislature has been quite specific as to the types that it is being concerned with here and it says:

but only in the circumstances prescribed by the regulations –

So of course, if there are no regulations that are prescribed, for example, in relation to application to land, or an application to land falls outside the prescribed circumstances, then “any processed, recycled, re‑used or recovered substance produced wholly or partly from waste” that is applied to land will not be waste.

KEANE J:   You draw support for that from the last sentence.

MS MITCHELMORE:   That is correct, your Honour, yes, and indeed the ‑ ‑ ‑

KEANE J:   You say that it speaks of circumstances prescribed by the regulations, so you need to go to the regulations to see permission?

MS MITCHELMORE:   Yes.

KEANE J:   You are not going to the regulations to look for proscription or prohibition?

MS MITCHELMORE:   That is right.  In my submission, when your Honours look at that last sentence, bearing in mind the legislative history where paragraph (d) was added subsequently to what are now paragraphs (a) through (e), so it was added ‑ ‑ ‑

GORDON J:   Is that to broaden the concept of “waste”?

MS MITCHELMORE:   In my submission, it is in relation to application to land or use as fuel because it is not a surplus – or it is actually being used for a purpose.   But your Honours will also see that the definition of the last sentence referred – inserted the “is or may be” – I think was a change from “can be”.  But your Honours will also see that it added “for the purposes of this Act”.  So we are dealing here with a very specific scenario for the purposes of the Act. 

So, while recycled substances, as Justice Basten in Terrace Earthmoving, might not really be thought of to be waste.  Being recycled terminates that classification.  In my submission, the last sentence of the definition is a very clear indicator that for the purposes of this Act a substance is not precluded from being waste for the purposes of the Act merely because it is or may be processed, recycled, reused or recovered. 

So, in my submission, on the proper construction of the paragraph read in the context of the definition, it is correct – or the Court of Criminal Appeal was correct in the decision it made and in circumstances where when one looks at the other paragraphs which are quite general in their nature and substances may quite easily fall within one paragraph or another, paragraphs (a) and (b) perhaps, or (b) and (c) being good examples, one needs to read “or” differently, in my submission, in relation to paragraph (d) as opposed to the other paragraphs of the definition.  Paragraph (e) is significant in that respect because it provides:

any substance prescribed by the regulations to be waste. 

So there is nothing to preclude, in my submission, the regulations to prescribe processed, recycled, reused or recovered substances unless my friend is right and they are completely excluded from the scope of regulation unless they are applied to land in the circumstances prescribed.

It can be tested, your Honours, when one looks, for example, at the definition of “asbestos waste”.  Asbestos waste is defined in the Act to mean waste that contains asbestos.  So “waste” is the base definition for the definition of “asbestos waste”.  It is often the case, and in fact was the case in this case, that in processing of building and demolition waste, asbestos is found.  But on my friend’s definition or the application for which my

friends contend, that substance can only be regulated if it is applied to land in the circumstances that are prescribed. 

In my submission, when one looks at the regulation for asbestos waste in the Act – and your Honours can see the    particular regulation that deals with asbestos waste in the application book at page 318 - your Honours can see that there is a quite extensive regime for activities that involve:

the transportation, disposal, re‑use or recycling of any type of asbestos waste, regardless of whether the activity is required to be licensed.

So it applies outside of the exemption regime and it was not in issue in this case.  But for the purposes of construction, your Honours will see that if my friends are right and if a – unless the processed, recycled, et cetera, material is applied to land, there are quite significant requirements that attach to asbestos waste in terms of transportation, for example, that in my submission reflect the degree of risk to human harm that the asbestos presents which just would not apply. 

So, in my submission, that supports the construction which the Full Court has adopted in this case, recognising that there is always a legislative balance between objects encouraging recycling, et cetera, but also reducing risk of harm to human health and degradation to the environment.  In circumstances where there is a regime under the Act that deals with the scope to grant exemptions to waste, including waste of this particular category, in my submission, there is not sufficient doubt to it that attends the decision of the Court of Criminal Appeal on either bases, the first being the definition of “waste” and the second being the proper construction of clause 3(b) of the regulations, which is the very regulation that prescribes the circumstances for the purposes of the definition in paragraph (d). 

In my submission, what my friends would require is, as my friend said in his oral submissions, an imposition of a purposive element to the definition in clause 3(b) which, in my submission, is just not there on the face of the regulation and, in my submission, the Court of Criminal Appeal was correct to say that clause 3(b) does no more than identify the circumstances that are prescribed for the purposes of paragraph (d).  So, for those reasons, your Honours, in my submission the Court of Criminal Appeal’s decision is not attended by sufficient doubt to warrant a grant of special leave.  If the Court pleases.

KEANE J:   Thank you, Ms Mitchelmore.  Mr Walker in reply.

MR WALKER:   If it please, your Honours.  The asbestos considerations go nowhere for these reasons.  As my learned friend properly points out, there is a highly specific provision for asbestos waste.  Nothing in our argument, nothing in the interpretation for which we contend, would prevent those highly specific provisions governing cases falling within them.  Indeed, that would be a consistent application of what we appeal to, namely, avoiding the general derogating from the special.  That is the first point.

The second point is that it is true that paragraph (d) was added, but it is not true that it adds - that is, it expands - the scope of materials within the definition of “waste”; to the very contrary.  That is because it is one of those remarkable defining provisions which used the expression “to be defined” as part of it.  So it announces that it is a subset you are talking about:

any processed, recycled, re‑used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations –

That is in order to be included within “waste”.  So it is a subset of “waste” which obviously extends beyond the subcategory of “processed, recycled, re‑used or recovered substance produced wholly or partly from” it and therefore this is not adding to the scope of materials that fall within “waste”.  It is adding a provision to understand the meaning of “waste”, and that is why the stipulations as to when such substances will be waste are very important. 

It falls into two parts:  the directly legislated applied to land, which is a defined expression; and used as fuel, and then goes on, giving with one hand, taking with the other:

but only in the circumstances prescribed by the regulations -

So those are circumstances – this is why I said the prescription is a proscription, that is, if you treat waste as a proscribed category of material, as it is by reason of the regulations governing the way in which it is to be dealt with, “processed”, et cetera, materials are only within that general class if it is applied to land, if it is done so in the circumstances prescribed by the regulations. 

So it is actually true – correct – that these are regulations which amount to a means of proscription because from the general notion of “applied to land” there are envisaged to be regulations which will – see the word “only” – exclusively and exhaustively describe what are the circumstances that fit within that definition.  If and only if it fits within that

definition it then falls as “processed”, et cetera, material to come within the meaning of the word “waste”. 

With respect, the way in which their Honours below dealt with the earlier decision of the Court in Terrace Earthmoving to which both parties have referred in their written submissions and which my learned friend has mentioned does not, with respect, satisfactorily explain how the course of authority should not be seen as one that contains, on the face of the record of the reports, a clash because it is quite impossible to read paragraph 43 of Acting Chief Justice Basten’s reason in Terrace Earthmoving to which both parties have made written reference without appreciating the great force in his Honour’s appropriate paraphrase that “The addition of paragraph (d) gave force to the conclusion that their waste had been processed, et cetera.  It will cease to be waste except in prescribed circumstances.”

That is the evidently public important outcome which has now been closed off, denied, as a matter of statutory interpretation, not as a matter of case‑by‑case determination by the reasoning against us on the stated case.  May it please the Court.

KEANE J:   The Court is of the view that the proposed appeals do not enjoy sufficient prospects of success to warrant the grant of special leave to appeal.  The applications for special leave will be refused.

Ms Mitchelmore, does your client seek costs?

MS MITCHELMORE:   Your Honour, we do seek costs, but I do not wish to be heard anything more than what I have said in the written submissions.

KEANE J:   Mr Walker?

MR WALKER:   We press the argument that you will have seen in our written reply that, for the reasons there put, it is neither in general terms appropriate, nor specifically available in this case.

KEANE J:   Very well then.  There will be no order as to costs.

MS MITCHELMORE:   If the Court pleases.

AT 10.38 AM THE MATTERS WERE CONCLUDED