Sale Elderly Citizens Village Inc v Environment Protection Authority Victoria
[2018] VSC 266
•24 May 2018
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2018 00407
| SALE ELDERLY CITIZENS VILLAGE INC (ACN 148 233 550) | Plaintiff |
| v | |
| ENVIRONMENT PROTECTION AUTHORITY VICTORIA | Defendant |
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JUDGE: | QUIGLEY J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 5 April and 7 May 2018 |
DATE OF JUDGMENT: | 24 May 2018 |
CASE MAY BE CITED AS: | Sale Elderly Citizens Village Inc v Environment Protection Authority Victoria |
MEDIUM NEUTRAL CITATION: | [2018] VSC 266 |
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ENVIRONMENTAL LAW – Pollution of groundwater – Clean up notice – Whether responsibility for pollution lies with occupier of the land – Whether occupier must have caused pollution - Environment Protection Act 1970 ss 1A – 1L, 4, 39, 62A, 62C
STATUTORY INTERPRETATION - ‘occupier’ – ‘premises’ – ‘upon or from which pollution has occurred or been permitted to occur’ – Whether premises includes subsurface of the land – Whether groundwater is part of the premises – Whether premises occupied – Environment Protection Act 1970 s 62A – Interpretation ofLegislation Act 1984 ss 35, 38
JUDICIAL REVIEW – Statutory authority – Discretionary decision – Whether decision a reasonable exercise of discretion
WORDS AND PHRASES – ‘land’ – ‘groundwater’ – ‘waters’ – ‘premises’ – ‘occupier’ – ‘upon’
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr G Burns | Crawford & Smart Pty Ltd Solicitors |
| For the Defendant | Mr T Boston | Environment Protection Authority Victoria |
HER HONOUR:
Introduction
This proceeding was brought by the Sale Elderly Citizens Village Inc (‘SECV’), challenging the legality of a notice (‘the Clean Up Notice’) served on it by the Environment Protection Authority Victoria (‘the EPA’) pursuant to s 62A(1)(a) of the Environment Protection Act 1970 (‘the EP Act’) with respect to SECV’s land at 51 to 53 Stead Street, Sale (‘the Land’).
The Clean Up Notice was served on SECV due to the presence of vinyl chloride pollution in the groundwater of the Land. SECV’s position is that the Clean Up Notice was not validly issued pursuant to s 62A(1)(a) of the EP Act.
The key issue in this proceeding is the proper construction of s 62A(1)(a) of the EP Act.
There are two aspects in dispute in relation to the construction of that section:
(a)whether s 62A(1)(a) should be interpreted so as to require the occupier to have also caused the pollution; and
(b)whether the groundwater is part of the ‘premises’ occupied by SECV for the purpose of s 62A(1)(a).
There was a further question as to the reasonableness of the exercise of discretion by the EPA to issue the Clean Up Notice in all of the circumstances.
For the reasons which follow, I have determined that on the proper construction of s 62A(1)(a), the Clean Up Notice was validly issued to SECV by the EPA, and that the EPA acted reasonably and lawfully in doing so.
Background
SECV is an incorporated association and a not-for-profit community organisation providing aged care services and accommodation in Sale, Victoria. SECV owns the Land, also known as ‘Northwood Park’, which is part-developed with 36 independent living units.[1] The Land was purchased in the 1980s as a greenfield site, which had been previously used for grazing purposes. The residential units occupy part of the Land, with the remainder being vacant for the past 30 or so years.
[1]Affidavit of Michelle Dowsett sworn 5 February 2018, [7].
SECV maintained the vacant land over that time, and the Land was secured by a mesh fence. There was no known dumping of waste or chemical deposition on the Land over the period of their ownership.
In December 2016, SECV decided to sell some of the vacant land and an environmental report was commissioned by the prospective purchaser. This report, entitled ‘Preliminary Contamination Assessment 51-53 Stead Street and Part 129 Patten Street, Sale’ dated 6 April 2017 undertaken by Beveridge Williams (the ‘Beveridge Williams Report’), revealed the presence of some chlorinated solvents in multiple groundwater samples taken at the site. The Beveridge Williams Report considered that a diffuse area chlorinated solvent plume was present below the majority of the site.[2] The Beveridge Williams Report considered that due to the dispersed nature of the contamination in the groundwater, further environmental monitoring was necessary to fully evaluate the potential risks posed by the contamination and to quantify the plume stability. Given the relatively shallow nature of the groundwater (approximately 3.5 m below the ground surface) and the volatile nature of vinyl chloride, there was a risk that vapour could rise through to the land surface and affect the residential occupiers of the site. The vinyl chloride in the groundwater was found to be at quantities which exceeded the safe amount according to the relevant EPA standards.
[2]Ibid exhibit ‘MD-2’.
The Beveridge Williams Report was considered by the EPA and an inspection carried out on 30 August 2017. As a consequence of the inspection, the EPA undertook further enquiries and made an assessment of the Beveridge Williams Report’s groundwater testing.
The assessment by the EPA reported that chlorinated solvents, including vinyl chloride, are extremely volatile even at low concentrations. Vapour Intrusion Screening Levels (‘VISLs’) provided by the United States Environment Protection Authority suggest vinyl chloride in groundwater can result in unacceptable health risks via vapour intrusion in residential land at concentrations as low as 1.5ug/L. Whilst VISLs are not endorsed or adopted by the EPA, the EPA may rely upon them to provide an indicative screening level assessment, and in this case, the VISLs confirmed the potential for unacceptable vapour impacts.[3]
[3]Ibid [1.3.3].
The Beveridge Williams Report recommended that a vapour risk assessment be conducted to assess the vapour risk to current and future users. The Senior Health Risk Adviser of the EPA agreed with these comments.[4]
[4]Ibid exhibit ‘MD–5’ [1.3.4]; Affidavit of Zachary Dornom affirmed 23 March 2018, [10].
There was no issue that the groundwater was contaminated at levels which amounted to pollution for the purposes of the EP Act.
On 25 September 2017, the EPA emailed a draft Pollution Abatement Notice (‘PAN’) to SECV.[5] The PAN was later withdrawn by the EPA.
[5]Affidavit of Michelle Dowsett sworn 5 February 2018, exhibit ‘MD–3’.
On 15 November 2017, the EPA informed SECV that it intended to serve a clean up notice pursuant to s 62A of the EP Act and provided a draft copy to SECV.[6] In response, SECV sought an internal review by the EPA of the decision as well as the basis and content of the draft notice. The internal review was unsuccessful.[7]
[6]Ibid exhibit ‘MD–5’.
[7]Affidavit of Stephen Lansdell affirmed 28 February 2018, exhibit ‘SL-1’.
On 6 December 2017, the EPA served the Clean Up Notice requiring SECV to supply an assessment of health risk to residents of the Land in accordance with the National Environment Protection (Assessment of Site Contamination) Measure 1999. The basis for the Clean Up Notice was the observation that vinyl chloride had been detected in groundwater at the Land. It was provided that due to the toxic characteristics of the vinyl chloride at the shallow depth of the affected aquifer below the ground surface, vinyl chloride occurring at the reported concentrations would result in a state of danger to human beings residing in buildings on the premises. The expected pathway for the vinyl chloride vapour was through the soil profile through to the surface of the Land.
The issues
SECV claims that the EPA acted beyond the power provided by s 62A of the EP Act in issuing the Clean Up Notice because SECV was not an occupier within the terms of s 62A(1). This was argued primarily on two grounds being:
(a) SECV had not caused the pollution; and
(b) the groundwater where the pollution was identified was not part of the ‘premises’.
A third question was argued which related to the decision to exercise the power under s 62A(1)(a) of the EP Act. In this regard, SECV argued that as they did not cause the pollution, in the reasonable exercise of the EPA’s discretion to take remedial action to rectify the pollution condition, the EPA ought to have used other powers which are at the EPA’s disposal, including cleaning up the pollution itself and seeking recompense against the polluter, if the polluter could be found.
The Environment Protection Act 1970
The purpose of the EP Act, set out at s 1A, is to create a legislative framework for the protection of the environment in Victoria having regard to the principles of environment protection. The principles of environment protection are set out at ss 1B to 1L.
1APurpose of Act
(1)The purpose of this Act is to create a legislative framework for the protection of the environment in Victoria having regard to the principles of environment protection.
(2)The principles of environment protection are set out in sections 1B to 1L.
(3)It is the intention of Parliament that in the administration of this Act regard should be given to the principles of environment protection.
1BPrinciple of integration of economic, social and environmental considerations
(1)Sound environmental practices and procedures should be adopted as a basis for ecologically sustainable development for the benefit of all human beings and the environment.
(2)This requires the effective integration of economic, social and environmental considerations in decision making processes with the need to improve community well-being and the benefit of future generations.
(3)The measures adopted should be cost-effective and in proportion to the significance of the environmental problems being addressed.
1DPrinciple of intergenerational equity
The present generation should ensure that the health, diversity and productivity of the environment is maintained or enhanced for the benefit of future generations.
1EPrinciple of conservation of biological diversity and ecological integrity
The conservation of biological diversity and ecological integrity should be a fundamental consideration in decision making.
1FPrinciple of improved valuation, pricing and incentive mechanisms
(1)Environmental factors should be included in the valuation of assets and services.
(2)Persons who generate pollution and waste should bear the cost of containment, avoidance and abatement.
(3)Users of goods and services should pay prices based on the full life cycle costs of providing the goods and services, including costs relating to the use of natural resources and the ultimate disposal of wastes.
(4)Established environmental goals should be pursued in the most cost effective way by establishing incentive structures, including market mechanisms, which enable persons best placed to maximise benefits or minimise costs to develop solutions and responses to environmental problems.
1GPrinciple of shared responsibility
(1)Protection of the environment is a responsibility shared by all levels of Government and industry, business, communities and the people of Victoria.
(2)Producers of goods and services should produce competitively priced goods and services that satisfy human needs and improve quality of life while progressively reducing ecological degradation and resource intensity throughout the full life cycle of the goods and services to a level consistent with the sustainability of biodiversity and ecological systems.
1HPrinciple of product stewardship
Producers and users of goods and services have a shared responsibility with Government to manage the environmental impacts throughout the life cycle of the goods and services, including the ultimate disposal of any wastes.
1IPrinciple of wastes hierarchy
Wastes should be managed in accordance with the following order of preference—
(a)avoidance;
(b)re-use;
(c)re-cycling;
(d)recovery of energy;
(e)treatment;
(f)containment;
(g)disposal.
1JPrinciple of integrated environmental management
If approaches to managing environmental impacts on one segment of the environment have potential impacts on another segment, the best practicable environmental outcome should be sought.
1KPrinciple of enforcement
Enforcement of environmental requirements should be undertaken for the purpose of—
(a)better protecting the environment and its economic and social uses;
(b)ensuring that no commercial advantage is obtained by any person who fails to comply with environmental requirements;
(c)influencing the attitude and behaviour of persons whose actions may have adverse environmental impacts or who develop, invest in, purchase or use goods and services which may have adverse environmental impacts.
1LPrinciple of accountability
(1)The aspirations of the people of Victoria for environmental quality should drive environmental improvement.
(2)Members of the public should therefore be given—
(a)access to reliable and relevant information in appropriate forms to facilitate a good understanding of environmental issues;
(b)opportunities to participate in policy and program development.
The following terms are defined in s 4 of the EP Act:
groundwater means any water contained in or occurring in a geological structure or formation or an artificial land fill;
occupier in relation to any premises includes a person who is in occupation or control of the premises whether or not that person is the owner of the premises and in relation to premises different parts of which are occupied by different persons means the respective persons in occupation or control of each part;
premises includes messuages, buildings, lands, and hereditaments of every tenure and any machinery, plant, appliance, or vehicle used in connexion with any trade carried on at any premises and includes a ship;
‘Lands’ or ‘land’ is not defined in the EP Act.
Section 62A of the EP Act provides the following:
62A Notice to take clean up and on-going management measures
(1)Notwithstanding anything to the contrary in this Act, the Authority may by notice in writing direct—
(a)the occupier of any premises upon or from which pollution has occurred or been permitted to occur;
(b)the person who has caused or permitted the pollution to occur;
(c)any person who appears to have abandoned or dumped any industrial waste or potentially hazardous substance; or
(d)any person who is handling industrial waste or a potentially hazardous substance in a manner which is likely to cause an environmental hazard—
to take the clean up and on-going management measures as specified in the notice.
Section 62C provides:
62C Presumption that occupier caused discharge etc.
If any segment or element of the environment is polluted as a result of a discharge, emission or deposit of any substance from or on any premises on which there is conducted any commercial or industrial undertaking, the occupier of the premises is deemed to have polluted that segment or element of the environment unless the occupier proves that the discharge, emission or deposit was unrelated to the commercial or industrial undertaking.
Does the occupier have to cause the pollution?
SECV claims that the EPA has acted in excess of its power by serving the Clean Up Notice on SECV, because SECV did not cause the pollution found in the groundwater beneath the Land.
The relevant subsection in question is sub-s (a) of s 62A(1), which provides:
Notwithstanding anything to the contrary in this Act, the Authority may by notice in writing direct—
(a)the occupier of any premises upon or from which pollution has occurred or been permitted to occur;
….
to take the clean up and on-going management measures as specified in the notice. [8]
[8]It was acknowledged by both parties that sub-s (b)-(d) of s 62A(1) were not relevant.
SECV acknowledged that it is the occupier of the Land. It also acknowledged that the groundwater was polluted. However, SECV urged an interpretation of s 62A(1)(a) that requires the occupier to have caused the pollution (to the groundwater).
SECV referred to s 62C which provides that there is a presumption that an occupier of industrial or commercial premises has caused the pollution. In my opinion, s 62C is not of any consequence here other than to provide part of the context of the legislation as it does not apply to this residentially used Land.
The evidence upon which the EPA relied was the Beveridge Williams Report which concluded that the contaminated plume extending under the Land was aged and diffuse. There was no causal connection to activities carried out on the SECV land, rather the evidence indicated that the source was off-site. SECV argued that as there is no evidence that SECV caused the pollution, there was no power to issue the Clean Up Notice.
At the time of issuing the Clean Up Notice, I accept there was credible and un-contradicted evidence and advice that:
(a)vinyl chloride was present in the near surface groundwater;
(b)vinyl chloride is extremely volatile and carcinogenic;
(c)there is a vinyl chloride plume across the whole of the Land;
(d)the southern part of the Land is occupied by a residential aged care facility;
(e)a vapour intrusion assessment should be conducted; and
(f)a vapour intrusion assessment is a proportionate response to the risk.
In my view, it is not correct to limit the interpretation of s 62A(1)(a) to that which requires the occupier to have actually caused the pollution which is found on the land. It is clear that s 62A(1)(a) relies on two key considerations: pollution is in existence upon the premises and a party is in occupation of that premises.
Section 62A(1) provides for four categories of persons to whom a Clean Up Notice can be directed. Sub-sections (b)-(d) of s 62A(1) identify categories of polluters. Sub-section (a) of s 62A(1) deals with the occupier of the premises where pollution ‘has occurred or been permitted to occur’ without reference to causation.
In my view, the term ‘has occurred’ is different to ‘is or has caused’. The former means to come to pass or take place or to happen[9] whereas to cause means something that produces an effect; the thing or person from which something results.[10] In my view, the reference to ‘occurred’ should be understood as meaning ‘exists’ in the context of s 62A(1)(a).
[9]See Macquarie Dictionary Online (Macquarie Dictionary Publishers, 2018) ‘occur, v.’.
[10]See Macquarie Dictionary Online (Macquarie Dictionary Publishers, 2018) ‘cause, n.’.
I will return to the question of whether the groundwater forms part of the premises but for the purposes of the interpretation of the clause, insofar as it relates to the question of causation, I have no doubt that s 62A(1)(a) does not require a causal element.
This conclusion is supported by authority in this Court in Premier Building & Consulting Pty Ltd v Spotless Group Limited (No. 12), where Byrne J said:
In subs (1) four different classes of person are referred to, including the occupier of the land upon which the pollution occurred. So, in the present case, a notice might have been given under s 62A(1)(a) to the occupier of the Premier land, as the polluted premises, and to the occupier of the Spotless land, as ‘the premises … from which pollution has occurred or been permitted to occur’. In the latter case, the occupier might receive a notice without any regard for its responsibility of the condition of the polluted premises. Unlike the other three classes, membership of the first class requires of the person nothing more than occupancy. The other three classes comprise persons who have done something which has or might cause pollution or an environmental hazard or, in the case of a person who has abandoned or dumped waste or a potentially hazardous substance, a person who appears to have done so. [11]
[11]Premier Building & Consulting Pty Ltd v Spotless Group Limited (No. 12) (2007) 64 ACSR 114, 211 [451].
Further, in construing s 62A(1)(a), the Interpretation of Legislation Act1984 provides that a construction that would promote the purpose or object underlying the Act shall be preferred to a construction that would not promote that purpose or object.[12] To construe s 62A(1)(a) as being limited to an occupier who is also the polluter would not achieve the purposes of the EP Act. The overarching purpose of the EP Act is to protect the environment and in protecting the environment, regard must be accorded to the principles of environment protection that are set out at ss 1B to 1L of the EP Act.[13] Section 1A(3) of the EP Act states that it is the intention of Parliament that in the administration of the EP Act regard should be given to the principles of environment protection. The most relevant principles here are those of the ‘Intergenerational Equity Principle’,[14] the ‘Polluter Pays Principle’,[15] the ‘Shared Responsibility Principle’[16] and the ‘Enforcement Principle’.[17]
[12]Interpretation of Legislation Act 1984 s 35; see also Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 384 [78].
[13]See paragraph 19.
[14]Environment Protection Act 1970 s 1D.
[15]Ibid s 1F(2).
[16]Ibid s 1G(1).
[17]Ibid s 1K(k).
Section 62A was introduced into the EP Act in 1984 through the Environment Protection (Review) Act 1984.[18] The history of s 62A as set out in the Explanatory Notes to the Environment Protection (Review) Bill 1984 states that the object of the Bill was to enhance the ability of the EPA to effectively perform its role of protecting the environment.[19]
[18]Environment Protection (Review) Act 1984 s 25.
[19]Explanatory Notes, Environment Protection (Review) Bill 1984.
Finally, the grammatical meaning of s 62A(1)(a) does not restrict the EPA from issuing a Clean Up Notice on an occupier who is not a polluter. The term ’occupier’ is defined in s 4(1) of the EP Act:
“occupier” in relation to any premises includes a person who is in occupation or control of the premises whether or not that person is the owner of the premises and in relation to premises different parts of which are occupied by different persons means the respective persons in occupation or control of each part;
(emphasis added)
There is nothing in the definition of ‘occupier’ which confines the term ’occupier’ to someone who is also the polluter. Further, to confine the term ’occupier’ to someone who is also the polluter would allow a non-polluter occupier to avoid any responsibility for the polluted land that it occupies. This would be contrary to the ‘Shared Responsibility Principle’[20] and the ‘Intergenerational Equity Principle’.[21]
[20]See Environment Protection Act 1970 s 1G.
[21]See Environment Protection Act 1970 s 1D.
I note the Order published in the Government Gazette on 4 June 2002 (as amended on 26 September 2013) where the Governor in Council declared the environment protection policy to be observed with respect to prevention and management of contamination of land at clause 8, which provides:
All occupiers will give effect to their duty to prevent contamination of land which they occupy. Without derogating any responsibility incurred by the polluter, occupiers will clean up or manage pollution of the site for which they are occupier (or ensure the pollution is cleaned up or managed). These actions will ensure that the site is suitable for its current use on the other elements and segments of the environment are protected. Occupiers will also use the site and manage any contamination in a manner which takes account of any relevant statement of environmental audit that may have been issued for the site.[22]
[22]Victoria, Victoria Government Gazette, No S 95, 4 June 2002, 4.
In the absence of an identified polluter, if ‘occupier’ was confined to someone who was also the polluter, it would mean that polluted land may remain polluted indefinitely. In Premier Building & Consulting Pty Ltd v Spotless Group Limited (No. 12), Byrne J said in the context of s 62A(2) that:
This is a case where Parliament has imposed statutory rights and obligations upon various persons where land is polluted. It could hardly be said that, for example, the occupier of land has a right to assert an exemption from these provisions so that the land remains indefinitely in a polluted state.[23]
[23]Premier Building & Consulting Pty Ltd v Spotless Group Limited (No. 12) (2007) 64 ACSR 11, 208 [437]. This comment was endorsed by the Court of Appeal in Yarra City Council v Metropolitan Fire and Emergency Services Board (2017) 223 LGERA 135, [199].
Further, s 62A(2) of the EP Act provides a strong textual indication that s 62A(1)(a) is intended to apply to a non-polluting occupier. Section 62A(2) provides that an occupier of premises the subject of a clean up notice, can apply for compensation from a polluter for costs incurred in complying with the clean up notice. There would be no need for a compensatory provision in the form of s 62A(2), if s 62A(1)(a) was intended to refer to an occupier who is also the polluter. This is also consistent with the observations made by Byrne J above.
In Yarra City Council v Metropolitan Fire and Emergency Service Board, the Court of Appeal stated:
In our opinion, there is no inconsistency between this context and the plain meaning of the words. Where the polluter still exists, it may be ordered to pay compensation under s 62A(2).[24]
[24]Yarra City Council v Metropolitan Fire and Emergency Services Board (2017) 223 LGERA 135, 162 [130].
And later:
s 62A is intended to make sure that the occupier, as the first recipient of the notice, cleans up and, secondly, that there is recovery from ‘the person who is actually responsible’. Section 62A(2) envisages recovery of clean up costs from a person who has greater responsibility for the pollution or industrial waste which forms the subject of the clean up notice than the occupier, who first receives the notice.[25]
[25]Ibid 192 [255].
In my view, it is clear that the EP Act makes a distinction between an ‘occupier’ on the one hand and a ‘polluter’ on the other. The regime of notices and other tools to be served on a range of persons from the non-offender occupier to the offender polluter is at the discretion of the EPA, with a compensation remedy available to the non-offender occupier present in other parts of the Act.[26]
[26]See, eg, Environment Protection Act 1970 ss 31A(1), 45X(4), 45ZA, 45ZB, 53ZZE, 62(2).
In conclusion, for all of the above reasons, I reject SECV’s submission that s 62A(1)(a) means that the occupier must also be responsible for, or the cause of, the pollution to fall within s 62A(1)(a) of the EP Act.
Does SECV ‘occupy any premises’ upon which pollution has occurred?
For the Clean Up Notice to be validly issued, SECV must be the ‘occupier of any premises’ upon which pollution has occurred.
At the trial, in the course of SECV’s reply, it became apparent that SECV was arguing that the groundwater was not part of the premises to which the Clean Up Notice applied. I gave directions for written submission to be filed in respect of this question.
In the course of the exchange of written submissions, the EPA sought to file and rely on an expert report which was prepared by an internal officer of the EPA.[27] The filing and reliance on the expert report was objected to by SECV.
[27]Document entitled ‘Expert Witness Report of Anne Northway’ dated 16 April 2018.
In my opinion, it is not necessary for the report to be admitted into evidence as an expert report. Whilst it provided a useful summary, a description of some of the aspects of the Beveridge Williams Report and was referred to by both parties, I have not relied upon it nor accepted it as an expert report. There is sufficient information contained in the Beveridge Williams Report and the EPA’s affidavits for me to make an assessment of the condition of the Land arising from the testing undertaken for the purposes of the Beveridge Williams Report.
Is the groundwater part of the premises?
The position advanced by SECV was that the groundwater, which is present beneath the surface of the Land, did not form part of the ’premises’ for the purposes of s 62A(1)(a).
The EP Act defines premises to include ‘lands’ amongst a wide range of interests in land:
premises includes messuages, buildings, lands, and hereditaments of every tenure and any machinery, plant, appliance, or vehicle used in connexion with any trade carried on at any premises and includes a ship;[28]
(emphasis added)
[28]Environment Protection Act 1970 s 4(1).
In the EP Act, ‘waters’ is defined as:
waters includes any reservoir, tank, billabong, anabranch, canal, spring, swamp, natural or artificial channel, lake, lagoon, waterway, dam, tidal water, coastal water or groundwater;[29]
(emphasis added)
[29]Ibid.
And the EP Act also provides that:
(2) Any reference in this Act to waters includes a reference to—
(a) the bed and sub-soil lying beneath those waters;
(b) the air space superjacent to those waters; and
(c) an open, piped or underground drain—
but does not include a reference to a drain which conveys waste to or which forms part of any works for the treatment of waste.[30]
[30]Ibid s 4(2).
‘Groundwater’ is defined in the EP Act as:
groundwater means any water contained in or occurring in a geological structure or formation or an artificial land fill;[31]
[31]Ibid s 4(1).
However, ‘lands’ or ‘land’ is not further defined in the EP Act.
The Macquarie Dictionary defines ‘land’ as:
‘land’ noun 1. the solid substance of the earth’s surface. 4. Law an area of ground together with any trees, crops or permanently attached buildings and including the air above and the soil beneath.[32]
[32]Macquarie Dictionary Online (Macquarie Dictionary Publishers, 2018).
SECV’s written submissions referred to the Butterworths Australian Legal Dictionary (1997) definition of ‘land’ which defines ‘land’ as ‘[p]hysically, the surface of the earth, the soil beneath (arguably to the centre of the earth unless modified by the terms of the grant)...’.[33]
[33]Sale Elderly Citizens Village Inc, ‘Plaintiff’s Further Submissions with Respect to “Ground Water”’, Submission in Sale Elderly Citizens Village Inc v Environment Protection Authority Victoria, S CI 2018 00407, 11 April 2018, [6]-[7].
I am of the view that ‘lands’, and consequently ‘premises’, for the purposes of the EP Act includes subsurface land.
SECV argued that the EP Act refers to three segments of the environment being water, atmosphere and land and that by the EP Act having separate parts of the legislation dealing with these segments of the environment individually there must be a purposeful intention to make a distinction between these segments of the environment.
SECV says that as a consequence, ‘groundwater’ should be treated separately from land because each of the three segments of the environment (water, atmosphere and land) are three separate and distinct segments and that ‘waters’, as a separate segment, includes in the definition ‘groundwater’. It was argued that by extending the definition of ‘waters’ to include any bed and sub-soil lying beneath those waters, by virtue of s 4(2) of the EP Act, that the structure of the EP Act accepts such a distinction.
In contrast, the EPA submitted that the definition of ‘land’ should be approached from both a purposive interpretation and consideration of the common law.
‘Land’ is defined in other legislation including the Property Law Act 1958 (‘the PLA’):
land includes land of any tenure, and mines and minerals whether or not held apart from the surface, buildings or parts of buildings (whether the division is horizontal, vertical or made in any other way) and other corporeal hereditaments; also a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from the land and also an undivided share in land; and mines and minerals include any strata or seam of minerals or substances in or under any land, and powers of working and getting the same;[34]
[34]Property Law Act 1958 s 18(1).
‘Land’ is defined in the Transfer of Land Act 1958:
land includes any estate or interest in land but does not include—
(a)an interest in land arising under the Mineral Resources (Sustainable Development) Act 1990; or
(b)a carbon sequestration right or soil carbon right granted in relation to Crown land under a Carbon Sequestration Agreement within the meaning of the Climate Change Act 2010;[35]
[35]Transfer of Land Act 1958 s 4.
‘Land’ is also defined in the Interpretation of Legislation Act 1984:
38Definitions
In all Acts and subordinate instruments, unless the contrary intention appears—
….
land includes buildings and other structures permanently affixed to land, land covered with water, and any estate, interest, easement, servitude, privilege or right in or over land;[36]
[36]Interpretation of Legislation Act 1984 s 38.
Each of these definitions do not explicitly deal with the subsurface of land. However, pursuant to s 62 of the PLA, a conveyance of land shall be deemed to include and shall operate to convey with the land, all waters and watercourses appertaining or reputed to appertain to the land.[37]
[37]Property Law Act 1958 s 62(1).
The profile of the geological structures and formations to a depth of approximately 6m below the surface of the Land consist of Quaternary aged clay, sand and gravel of varying colours, textures and moisture.[38] With depth, the moisture content increases. At between 3.59 m to 3.92 m below top of casing, groundwater was intercepted.
[38]Affidavit of Michelle Dowsett sworn 5 February 2018, exhibit ‘MD-2’ (part).
The groundwater sits within the microscopic spacings that exist within the clay, sand and gravel that makes up the known subsurface. The groundwater is not a single cohesive body of water that runs within the defined channel like that of a surface stream or river. Rather, groundwater arbitrarily percolates through the microscopic spacings in the clay, sand and gravel subsurface and is evident as moisture to varying degrees within that subsurface.
Examination of the Beveridge Williams Report of the soil samples indicated that moisture existed through the soil profile. This moisture is groundwater.
The definitions of the words ‘premises’ and ‘waters’ and a purposive approach to the construction of the s 62A(1)(a) does not mean premises includes only the surface intersection of the land with the atmosphere.
I am of the view that groundwater exists within the soil profile of land and does so to an extent that it is so intermingled with the soil profile that it is part of the subsurface, and consequently part of the lands, and thus part of the premises for the purpose of s 62A(1)(a).
This conclusion may be sufficient to deal with this question, however the EPA made substantial submissions in relation to this issue, which I will now address.
Does SECV occupy the premises (including the subsurface and groundwater)?
There is no contest that SECV owns and occupies the Land. The question in the context of s 62A(1)(a) is the extent that the subsurface, and whether the groundwater, forms part of that occupation.
The position at common law is that ownership of land confers entitlement to all that lies beneath the surface of the land to a depth ‘at which physical features such as pressure and temperature render the concept of the strata belonging to anybody so absurd as to be not worth arguing about’.[39]
[39]Bocardo SA v Star Energy UK Onshore Ltd [2011] 1 AC 380, 399 [27].
Where structure at a particular depth ‘can be worked’ is an indication that the strata at that level is owned by the landowner.[40] In Bocardo SA v Star Energy UK Onshore Ltd, the depth of between 800 and 2800 ft was held by the UK Supreme Court to be owned and in possession of the landowner.[41]
[40]Ibid.
[41]Ibid 399 [28], [30]-[31].
There are certain exceptions to ownership of the subsurface. For example, without being exhaustive:
·gold and silver have always belonged to the Crown;[42]
·s 9 of the Mineral Resources (Sustainable Development) Act 1990 also applies to further exclude the landowner’s claims to subsurface minerals; and
·s 14 of the Greenhouse Gas Geological Sequestration Act 2008 vests in the Crown ownership over all underground geological storage formations which are located on private land.
[42]Wade v NSW Rutile Mining Co Pty Ltd (1969) 121 CLR 177, 187.
Groundwater, like light and air, is treated as a public resource and is not capable of private ownership. It is therefore not part of an owner’s interest in land. The common law position in relation to water, including groundwater and surface water, has been affected by the Water Act1989.
The term ‘occupier’ is defined in s 4(1) of the EP Act to mean:
occupier in relation to any premises includes a person who is in occupation or control of the premises whether or not that person is the owner of the premises and in relation to premises different parts of which are occupied by different persons means the respective persons in occupation or control of each part;
In Di Napoli v New Beach Apartments Pty Ltd, a case involving whether rock anchors projecting into the plaintiff’s land constituted a trespass, Young CJ stated that, with respect to subterranean rights, ‘a person has substantial control over land underneath his or her soil for considerable depth’.[43]
[43]Di Napoli v New Beach Apartments Pty Ltd (2004) 11 BPR 21, 493, 21,495 [18].
SECV is the occupier of the subsurface of the premises at the depths where the groundwater was intercepted because they are and have the prima facie right to be in occupation and control of the subsurface of the land at those depths. No other person could assert that right.
The definitions of land as set out above at paragraphs 62 to 64 do nothing which abrogate from the common law position that land includes the subsurface to the extent not alienated by agreement, common law and/or statute. If it were otherwise, a landowner would not be able to maintain an action for trespass to land where a stranger without permission or authority for example constructs a well that penetrates the subsurface of the owner’s land or inserts rock anchors within the land.[44]
[44]See, eg, Di Napoli v New Beach Apartments Pty Ltd (2004) 11 BPR 21, 493, 21,495 [19], 21,497 [32]–[36]; see also Stoneman v Lyons [1974] VR 797, 802.
Groundwater is not owned by SECV, but is present on and within the subsurface land owned by it. I accept on this analysis that SECV does not need to be the owner of the groundwater for SECV to be the occupier and for the power to be properly exercised. Occupation of premises upon which pollution exists is the relevant test. Here, polluted groundwater is on the land albeit on the subsurface part of it.
SECV is occupier of the premises, including the subsurface of the premises at least to the depths where the groundwater was intercepted and the groundwater at those depths. It does not matter that SECV does not own the groundwater.
Has pollution occurred upon the premises?
As previously noted, I accept that ‘occurred’ should be read as ‘exists’.[45] The question then becomes does pollution exist upon the premises.
[45]Explanatory Notes, Environment Protection (Review) Bill 1984 (‘Abatement of Pollution’).
The samples MW01, MW02, MW04 and MW05 recorded elevated levels of the carcinogen vinyl chloride.[46] In the opinion of the writer of the Beveridge Williams Report, the vinyl chloride has spread throughout the groundwater of the Land as a ’diffuse chlorinated solvent plume….below the majority of the site’.[47]
[46]Affidavit of Michelle Dowsett sworn 5 February 2018, exhibit ‘MD-2’ (‘Appendix E Table 5’).
[47]Ibid 18 [7.2].
The presence of vinyl chloride in the groundwater is ‘extremely volatile’ in character and means that vinyl chloride in its vapour form moves up through the soil profile to the surface. No soil samples were taken at the same depth as the groundwater and soil sampling was limited.
It was accepted by the parties that the groundwater was polluted, but SECV did not accept that the subsurface soil was polluted. It is now a matter of whether that pollution was upon premises which SECV occupied.
For the purpose of s 62A(1)(a), the premises may be either ‘upon or from which pollution’ exists. That is, the pollution may either exist ‘upon’ or ‘from’ the premises.
The EPA submitted that ‘from’ had its natural meaning and that therefore ‘from’ means that the subject premises is the source premises of the pollution. Further, that ‘upon’ meant ‘on’ the premises, but it was not limited to ‘on’ as in on top of the premises. The EPA argued that if pollution is on the premises, it simply means it has some contact with the premises, that it's in a position in relation to that premises, or that it's in contact with that premises.[48]
[48]Transcript of Proceedings, Sale Elderly Citizens Village v Environment Protection Authority Victoria (Supreme Court of Victoria, S CI 2018 00407, Quigley J, 5 April 2018) 17.20–18.10.
The Macquarie Dictionary defines ‘upon’ as:
‘upon’ preposition: 1. ‘up and on; upwards so as to get or be on.’ 2.’in an elevated position on.’ 3. ‘on, in any of various senses (used as an equivalent of on with no added idea of ascent or elevation, and preferred in certain cases only for euphonic or metrical reasons).’[49]
[49]Macquarie Dictionary Online (Macquarie Dictionary Publishers, 2018).
The Macquarie Dictionary defines ‘on’ as:
‘on’ preposition: a particle expressing: 1. ‘position above any in contact with a supporting surface.’ 2. ‘contact with any surface.’ 4. ‘situation, place, location, etc.’ 7. ‘state, condition, course, process, etc.’ 11. ‘position with relation to something else.’[50]
[50]Ibid.
I accept that ‘upon’ in the context of s 62A(1)(a) is not limited to pollution that is above the surface of the premises but includes pollution that is on the premises where it is beneath the surface of the premises as well. In any event, even if ‘upon’ was given a more limited interpretation, the subject premises includes the subsurface land and there are parts of the subsurface where pollution is ‘upon’ it, in the sense that there is pollution above that subsurface part of the premises.
I accept that the subsurface pollution is present in the groundwater, and that the pollution is ‘upon’ the premises. Accordingly, SECV, being the occupier of premises upon which exists a carcinogen in the form of vinyl chloride, may be served with a Clean Up Notice under s 62A(1)(a) of the EP Act.
Was the decision to issue a Clean Up Notice to SECV a reasonable exercise of the EPA’s discretion?
Finally, SECV argued that the EPA acted unreasonably in exercising its discretion to issue the Clean Up Notice under s 62A(1)(a).
Subsection 62A(1)(a) confers on the EPA a discretion to exercise the power granted therein. Other than the EPA being satisfied that the recipient of a Clean Up Notice is the ‘occupier of the premises’ and the ‘premises‘ is ‘upon or from which pollution has occurred or been permitted to occur‘, the EP Act does not prescribe any criteria or factors which the EPA must consider before it can exercise its discretion and serve a Clean Up Notice on an occupier.[51]
[51]See Minister for Aboriginal Affairs v Peko Wallsend (1986) 162 CLR 24, 40.
Even though this power is an unconfined discretionary power, it must still be exercised reasonably.[52] Within this area of reasonableness the decision maker has a genuinely free discretion.
[52] Minister for Immigration v Li (2013) 249 CLR 332, 363 [66].
Reasonableness in this context must mean legal reasonableness. The standard of reasonableness is the standard indicated by the true construction of the statute. The true construction of the statute is to be determined by looking to the scope and purpose of the statute because the question to which the standard of reasonableness is addressed is whether the statutory power has been abused.[53]
[53]Ibid 364 [67].
The courts have identified various grounds to inform the enquiry as to whether the legal reasonableness has been met. These include, that a discretionary decision will be reasonable if it:
·is legal and regular and not arbitrary, vague or fanciful;[54]
·conforms with the true construction of the statute. If it does not, it is an abuse the statutory power;[55]
·is not irrational or one which is so unreasonable that no reasonable person could have arrived at it;[56]
·does not involve bad faith, dishonesty, unreasonableness;[57]
·does not give attention to extraneous circumstances or disregard public policy;[58]
·does not involve the decision-maker misdirecting itself as to the operation of the statute, taking into account irrelevant considerations or failing to take into account relevant considerations;[59]
·gives adequate weight to a relevant factor of great importance and does not give excessive weight to an irrelevant factor of no importance;[60]
·is a proportionate response;[61] and
·has an evident and intelligible justification.[62]
[54]Ibid 363 [65].
[55]Ibid 363-364 [67].
[56]Ibid 364 [68].
[57]Ibid 364-365 [69].
[58]Ibid.
[59]Ibid 365 [71].
[60]Ibid 366 [72].
[61]Ibid 366 [74].
[62]Ibid 367 [76].
In reviewing an exercise of discretionary power, ‘it is not enough that an appellate court would have taken a different course. What must be evident is that some error has been made in exercising the discretion’.[63]
[63]Ibid 366 [75], citing House v The King (1936) 55 CLR 499, 504-505.
On the facts of this case, in deciding to issue the Clean Up Notice, the EPA delegate had regard to the following matters identified in the material before me:
·the quantitative and scientifically based findings contained in the Beveridge Williams Report prepared by Beveridge Williams, an independent and reputable environmental consultancy that had been retained by a third party. Of relevance was the finding that vinyl chloride was in the groundwater at the site;[64]
·the findings of the First Review, Second Review and Health Risk Advice. These findings were that there was a risk to human health from vinyl chloride vaporising into the dwellings at the premises and that vinyl chloride was carcinogenic;[65]
·the fact that the premises was used in part for a residential aged care facility;
·the cost of undertaking the vapour intrusion assessment recommended in the Beveridge Williams Report was a proportionate response to the human health risk posed by the vinyl chloride present in the groundwater; [66] and
·EPA policy.[67]
[64]Affidavit of Zachary Dornom affirmed 23 March 2018, [11], [19]; see also Affidavit of Michelle Dowsett sworn 5 February 2018, exhibit ‘MD–5’ (part).
[65]Affidavit of Michelle Dowsett sworn 5 February 2018, exhibit ‘MD–5’ (part).
[66]Affidavit of Zachary Dornom affirmed 23 March 2018, [28].
[67]Ibid [22].
In the context of the discretion available, I am satisfied that these matters justified the issue of the Clean Up Notice.
Whilst there were other actions under the EP Act that the EPA could have taken, there was no valid reason why it was not reasonable for the EPA to have taken the course that it did.
Conclusion
In summary, s 62A(1)(a) is directed to occupiers of sites on which pollution exists and does not require any finding that the occupier caused the pollution identified on the land.
Groundwater as found on the site formed part of the lands and premises occupied by SECV for the purposes of s 62A(1)(a). Accordingly, SECV may be served a Clean Up Notice under s 62A(1)(a) of the EP Act, as the occupier of premises upon which exists a carcinogen in the form of vinyl chloride.
As such, I find that the Clean Up Notice was validly issued and in addition that it was a reasonable exercise of the discretion available to the EPA pursuant to the provisions of the EP Act.
Accordingly, I am not prepared to make the orders sought by the plaintiff.
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