Weston Aluminium Pty Ltd v Environment Protection Authority

[2022] NSWCA 236

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Weston Aluminium Pty Ltd v Environment Protection Authority [2022] NSWCA 236

Hearing dates:

2 November 2022

Date of orders:

17 November 2022

Decision date:

17 November 2022

Before:

Ward P at [1];
Basten AJA at [2];
Preston CJ of LEC at [42].

Decision:

(1)   Allow the appeal and set aside the orders made in the Land and Environment Court on 17 November 2021, entered on 18 November 2021.

(2)   In place of those orders:

(a) Declare that Weston Aluminium Pty Ltd is exempt from the requirement to pay contributions under s 88 of the Protection of the Environment Operations Act 1997 (NSW) in respect of the scheduled activities undertaken at its Kurri Kurri premises.

(b)   Order that the Environment Protection Authority pay Weston Aluminium’s costs of the trial.

(3)   Order that the respondent Authority pay the appellant’s costs in this Court.

Catchwords:

ENVIRONMENT AND PLANNING – waste disposal – licensing of premises – scheduled activity – waste disposal (thermal processing) – exemption from obligation to pay contribution – whether appellant is occupier of scheduled waste disposal facility – licence requirement arises because facility used for treatment and processing – distinction between treatment and processing and disposal – disposal does not include treatment leading to destruction – Protection of the Environment Operations Act 1997 (NSW), s 88 – Protection of the Environment Operations (Waste) Regulation 2014 (NSW), cl 20(3)

STATUTORY INTERPRETATION – definitions – “waste disposal” – term not defined in statute – where term found in heading to clause – heading as extrinsic material – meaning to be determined by reference to statutory context – Dictionary meanings unable to determine statutory meaning

Legislation Cited:

Interpretation Act 1987 (NSW), s 35

Protection of the Environment Operations Act 1997 (NSW), ss 3, 5; Ch 3, ss 48, 88; Sch 1, Pt 1, cll 1, 26, 34, 39, 42, 40, 50; Pt 3, Divs 1, 2; Sch 2, cl 5

Protection of the Environment Operations (Waste) Regulation 2014 (NSW), cll 3, 19, 20, 26

Cases Cited:

Environment Protection Authority v Grafil Pty Ltd (2019) 238 LGERA 147; [2019] NSWCCA 174

Category:

Principal judgment

Parties:

Weston Aluminium Pty Ltd (Appellant)
Environment Protection Authority (Respondent)

Representation:

Counsel:
B Walker SC / S Berveling (Appellant)
Z Heger / T Poisel (Respondent)

Solicitors:
G&B Lawyers (Appellant)
DP Anderson, Environment Protection Authority (Respondent)

File Number(s):

2021/350849

Publication restriction:

N/A

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 4

Citation:

[2021] NSWLEC 131

Date of Decision:

17 November 2021

Before:

Pepper J

File Number(s):

2021/00032004

HEADNOTE

[This headnote is not to be read as part of the judgment]

In 1996, the appellant, Weston Aluminium Pty Ltd, obtained development consent for the construction and operation of an aluminium dross recycling plant at its premises in Kurri Kurri. The appellant had an approval to process scrap aluminium metal, aluminium dross, spent pot lining, illicit drug waste and pharmaceutical waste using its furnaces. The appellant held an environment protection licence pursuant to Ch 3 of the Protection of the Environment Operations Act 1997 (NSW) (“Operations Act”). Schedule 1 of the Operations Act provides that a “scheduled activity” is an activity for which a licence is required for the premises at which it is carried out. The appellant’s licence was for carrying out “Metallurgical activities”, “Resource recovery activities” and “Waste storage activities”.

In 2018, the appellant obtained approval for the construction of a new thermal treatment facility on the same premises, and to use that facility to treat clinical, pharmaceutical, medical, and illicit drug wastes. In November 2020, the appellant’s licence was amended to include the scheduled activity of “Waste disposal (thermal treatment)”. Schedule 1 cl 50 to the Operations Act defines “thermal treatment” as “the processing of wastes by burning, incineration, thermal oxidation, gasification, pyrolysis, plasma or other thermal treatment processes”. This produces residual ash, which is sorted to recover metal and oxides and then disposed of in a landfill. Thermal treatment also discharges exhaust gases into the atmosphere.

In 2020, the respondent Environment Protection Authority advised the appellant that, as licensee of a waste facility, it was required to pay a contribution in respect of waste received at the facility, pursuant to s 88 of the Operations Act. The Dictionary to the Operations Act defines “waste facility” as “any premises used for the storage, treatment, processing, sorting or disposal of waste …”. The obligation to pay a contribution was said to have arisen only due to the activity of thermal treatment resulting in destruction of the waste.

The appellant brought proceedings in the Land and Environment Court, seeking a declaration that it was exempt from paying a contribution under cl 20(3) of the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) (“Waste Regulation”). Clause 20(3) grants an exemption to “an occupier of a scheduled waste facility” if “the facility is not a scheduled waste disposal facility” and “the facility is a scheduled waste facility because an activity listed in clause 26 (Metallurgical activities) of Schedule 1 to the Act is carried on at the facility”. It was common ground that the appellant operated a scheduled waste facility and conducted metallurgical activities.

Accordingly, the primary issue was whether the facility was a scheduled waste disposal facility. Clause 3(1) of the Waste Regulation defines a “scheduled waste disposal facility” as a “waste facility that is required to be licensed under the Act because it is used for the disposal of waste”. By contrast, a “scheduled waste facility” is defined as “a waste facility that is required to be licensed under the Act because it is used for the storage, treatment, processing, sorting or disposal of waste”.

The primary judge held that the appellant was the occupier of a scheduled waste disposal facility and therefore liable to pay contributions. The primary judge held that nothing in the Act or the Regulation displaced the ordinary and natural meanings, which includes “to get rid of”. The thermal treatment facility was a scheduled waste disposal facility because the incineration of the waste dealt with the waste with finality.

On appeal, the primary issue was whether the appellant was an occupier of a scheduled waste disposal facility.

The Court (Ward P, Basten AJA, and Preston CJ at LEC) held, allowing the appeal:

1. “Disposal” appears in the heading, but not the operative provisions, of Sch 1 cl 40. The heading to a clause does not form part of the instrument, but may be relevant extrinsic material. The primary judge erred by adopting the ordinary meaning of “disposal”. Where a term is undefined in a statute or regulation, it does not follow that it should be given its ordinary or natural meaning. Dictionary definitions can only assist to identify the range of possible meanings. To determine the actual meaning, it is necessary to refer to the use of the term in its text and context: [29], [33]-[35].

Interpretation Act 1987 (NSW), s 35(2), applied.

1. A licence is required for premises at which a scheduled activity is carried on. Having regard to the definition of “scheduled waste disposal facility”, a licence is required for premises at which a waste facility is carried on because the use of the waste facility for the disposal of waste is an activity listed in Sch 1. The activity defined in Sch 1 cl 40(1), “thermal treatment of hazardous and other waste”, is an activity for which a licence is required for the appellant’s premises: [50], [54].

Environment Protection Authority v Grafil Pty Ltd (2019) 238 LGERA 147; [2019] NSWCCA 174, followed.

1. The appellant’s thermal treatment facility was not a scheduled waste disposal facility because:

(a) Clause 20(3) of the Waste Regulation contemplates that a facility will be a scheduled waste facility because an activity listed in cl 26 is carried on at the facility, but which is not a scheduled waste disposal facility. It contemplates that a scheduled waste facility at which metallurgical activities are carried out, is not used for the “disposal of waste”. The destruction which occurs in the course of metallurgical activities does not involve “disposal of waste” for the purposes of the definition of scheduled waste disposal facility: [1], [23], [40].

(b) The definition of scheduled waste facility covers the quintuple activities of “storage, treatment, processing, sorting or disposal of waste”. There is no clear distinction between processing and treatment. Because Sch 1, cl 40 refers to treatment and processing, but not disposal, that requirement for a licence arises because the facility is used for the treatment and processing of waste, and not for the disposal of waste: [36]-[37], [55]-[57], [59].

(c) The use of the term “disposal of” in the broader definition of scheduled waste facility, without reference to treatment or processing, militates against that term being used to include all treatment leading to destruction. The use of the disjunctive “or” in the definition of scheduled waste facility distinguishes between the treatment and processing of waste, and the disposal of waste: [38]-[39].

JUDGMENT

1. WARD P: I have had the advantage of reading in draft the judgment of Basten AJA and the additional comments of Preston CJ of LEC, with which I agree. Of particular significance in my opinion is the fact that cl 20(3) of the Waste Regulation, as Basten AJA notes (see at [23]), contemplates the possibility that there will be a “scheduled waste facility” that is so because an activity listed in cl 26 is carried on at the facility but which is not a “scheduled waste disposal facility”. Thus it must have been contemplated that there could be a scheduled waste facility on which the relevant metallurgical activities are carried out but which is not used for the “disposal of waste”. To my mind that speaks against the construction for which the respondent has contended.

2. BASTEN AJA: The appellant, Weston Aluminium Pty Ltd, holds an environment protection licence issued under Ch 3 of the Protection of the Environment Operations Act 1997 (NSW) (“Operations Act”) in relation to certain activities undertaken at a waste facility operated by the company at Kurri Kurri. The short issue raised on the appeal is whether the appellant is liable to pay a contribution to the Environment Protection Authority (“the Authority”), pursuant to s 88 of the Operations Act, in respect of waste received at the facility.

3. In proceedings in the Land and Environment Court from which this appeal is brought, Pepper J (the primary judge) upheld the Authority’s claim that contributions were payable. In so holding, the primary judge rejected a claim by the appellant that it was exempt from the requirement to pay contributions because it satisfied cl 20(3) of the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) (“Waste Regulation”). While the legislative scheme is drafted with a level of obscurity which on one reading supported the conclusion reached by the primary judge, for the reasons set out below, the better view is that the exemption was satisfied. Accordingly, the appeal must be allowed.

Factual background

4. Because the issues raised on the appeal turn almost entirely upon the construction of the Operations Act and relevant parts of the Waste Regulation, the material facts may be briefly stated.

5. In 1996, the appellant obtained development consent for the construction and operation of an aluminium dross recycling plant at its premises in Kurri Kurri. Pursuant to that consent, as subsequently modified, the appellant had approval to process up to 35,000 tonnes of scrap aluminium metal and 40,000 tonnes of aluminium dross and spent pot lining per annum. It also had permission to process up to 200 tonnes of illicit drug waste and 1,000 tonnes of pharmaceutical waste over a two-year trial period, using the existing furnaces.

6. In 2018, the appellant obtained approval for the construction of a new thermal treatment facility on the same land, and for the use of the facility to treat up to 8,000 tonnes of waste per year, including clinical and related waste, waste pharmaceuticals, drugs and medicines, waste from the production and preparation of pharmaceutical products and a smaller quantity of illicit drugs.

7. It was common ground that the destruction of such materials by thermal treatment was the appropriate means of disposing of such wastes for environmental and community health reasons. Thermal treatment was expected to produce solid waste in the form of residual ash constituting, by weight, approximately 10-15% of the waste received.

8. Pursuant to the legislative scheme to be identified shortly, Sch 1 to the Operations Act identified a number of specified activities as “scheduled activities” for the purposes of the Act, such activities requiring a licence authorising the holder of the licence to carry on the activities. The appellant held Environment Protection Licence No 6423. In May 2019, that is before the commencement of the operation of the thermal treatment plant, the licence authorised scheduled activities under three provisions of Sch 1, namely “Metallurgical activities” (cl 26), “Resource recovery” (cl 34) and “Waste storage” (cl 42). The metallurgical activities were identified as (i) aluminium production (scrap metal) and (ii) scrap metal processing. The activity under the category of “resource recovery” was identified as “recovery of hazardous and other waste”. The activity under the category “waste storage” covered the storage of “hazardous, restricted solid, liquid, clinical and related waste and asbestos waste”.

9. Although the appellant was, prior to 2020, using in its aluminium processing furnaces clinical and related waste, which included pharmaceutical, drug or medicine waste and waste resulting from medical and related clinical activity, including waste containing human tissue and the product of medical research, the Authority did not consider that contributions were then payable.

10. On 13 January 2020, the Authority wrote to the appellant advising that it was required to pay “the waste levy on all waste received at the Premises for disposal by incineration”. The letter acknowledged that the appellant had not previously been liable to pay the “waste levy” stating:

“The variation to the Licence on 16 August 2019 which added the scheduled activity of ‘Thermal treatment of hazardous and other waste’ brings the Premises into the waste levy system.”

The letter further advised that scheduled waste facilities were liable to pay contributions under s 88 of the Operations Act, including:

“•   Scheduled waste disposal facilities (ie EPA-licensed landfills) which are located in the regulated area or receive waste from the regulated area;

•   Scheduled waste facilities that are not scheduled waste disposal facilities (eg EPA-licensed waste processing, resource recovery and waste storage facilities) which are located inside the regulated area or receive waste from the regulated area.”

11. The appellant’s operations were both conducted in and received waste from the “regulated area”. Again, it is not in dispute that the trigger for the change in status of the appellant under s 88 of the Operations Act was the inclusion of a new scheduled activity, known as “Waste disposal (thermal treatment)”, under cl 40 of Sch 1 to the Operations Act.

12. Although it is of doubtful relevance to the resolution of the appeal, the evidence disclosed that in September 2020 the appellant sought to vary the licence to delete the scheduled activity “Waste disposal (thermal treatment)” because it had received authority to divert “all residual (Thermal Processing Facility) ash from disposal at landfill and operate a fully closed loop resources recovery facility”. The application appears to have based on the premise that the plant was a “scheduled waste disposal facility” because it was disposing of the residual ash to landfill. As will be seen, that was treated by the Authority as a misunderstanding of the basis on which the appellant was said to be liable to pay contributions under s 88. In short, “waste” referred to waste received at the facility, not waste created by processing at the facility.

Statutory scheme

13. The objects of the Operations Act include the following:

3    Objects of Act

The objects of this Act are as follows–

…

(d)   to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following–

…

(ii)   the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

(iia)   the elimination of harmful wastes,

(iii)   the reduction in the use of materials and the re-use, recovery or recycling of materials,

….

14. Section 5 contains a definition of “scheduled activities”, referring to the activities listed in Sch 1 to the Act. Section 48(1) states that that section applies to scheduled activities where Sch 1 indicates that a licence is required for premises at which the activity is carried on. It is an offence to carry on such an activity without a licence or contrary to the terms of a licence: s 48(2).

15. The relevant operative provisions for present purposes are found in s 88 which relevantly states:

88   Contributions by licensee of waste facility

(1)   This section applies to waste facilities that are required to be licensed under this Chapter.

(2)   The occupier of a waste facility to which this section applies is required to pay to the EPA in respect of all waste received at the facility such contribution as is prescribed by the regulations.

…

(5)   The regulations may—

(a)   provide for contributions to be calculated on such basis (including such estimates), and in accordance with such factors, as may be specified or described in the regulations, and

(b)   provide for the exemption of specified occupiers, or specified classes of occupiers, from the requirement to pay contributions, and

(c)   provide for the exemption of specified wastes from the calculation of contributions (including for example wastes that are recycled, re-used, recovered or processed), and

(d)   provide for the payment of rebates to specified occupiers or specified classes of occupiers.

16. Section 88(3) makes it an offence to fail to pay the whole or any part of a contribution payable under that section. While s 88(5) provides for relevant regulations, Sch 2 confers further regulation-making powers, including in particular in relation to waste: Sch 2, cl 5. As there is no dispute that the relevant parts of the Waste Regulation were valid, it is not necessary to consider the scope of the regulation-making powers.

17. The Operations Act contains a Dictionary which defines a number of terms used within the Act. Schedule 1, Pt 3 contains further definitions, dealing with “waste classifications” (Div 1) and other definitions (Div 2) some of which concern waste. Importantly, for present purposes, Sch 1, Pt 1 identifies scheduled activities which constitute “premises-based activities”. (Schedule 1, Pt 2 deals with activities which are not premises-based and are of no present relevance.)

18. Before identifying the relevant classes of scheduled activities, it is convenient to identify the exemption provided by the Waste Regulation. Although the specific exemption relied upon by the appellant is that found in cl 20(3), it is convenient to note the surrounding provisions. Thus, relevantly for present purposes, cl 20 provides:

20   Exemption of certain other occupiers from requirement to pay contributions

Note—

See clause 109 in relation to reporting requirements for occupiers of facilities who are not required to pay contributions because of an exemption under this clause.

(1) The occupier of any waste facility that is not a scheduled waste facility is exempt from the requirement to pay a contribution to the EPA under section 88 of the Act.

…

(3) The occupier of a scheduled waste facility is exempt from the requirement to pay contributions to the EPA under section 88 of the Act if—

(a)   the facility is not a scheduled waste disposal facility, and

(b) the facility is a scheduled waste facility because an activity listed in clause 26 (Metallurgical activities) of Schedule 1 to the Act is carried on at the facility.

(4) The occupier of a scheduled waste facility is exempt from the requirement to pay contributions to the EPA under section 88 of the Act if—

(a)   the facility is a scheduled waste facility only in respect of the storage, treatment, processing or sorting of clinical and related waste, hazardous waste, liquid waste or restricted solid waste (or any combination of those kinds of waste), or

(b)   the facility is a scheduled waste facility only in respect of the disposal of slags or virgin excavated natural material (or both of those kinds of waste).

…

19. A number of points need to be made with respect to the content of cl 20. First, it may be noted that the heading to the clause assumes other occupiers have been granted exemption in previous provisions. That is no longer the case, following the repeal of the preceding cl 19. (Clause 19 as enacted provided no guidance as to the operation of cl 20.)

20. Secondly, cl 20(1) distinguishes between the occupier of a “waste facility” and the occupier of a “scheduled waste facility”. The Dictionary to the Operations Act provides a definition in the following terms:

waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).

The term “scheduled waste facility” is defined in the Waste Regulation, cl 3(1) as follows:

scheduled waste facility means a waste facility that is required to be licensed under the Act because it is used for the storage, treatment, processing, sorting or disposal of waste.

21. Thirdly, and importantly for present purposes, an exemption under cl 20(3) is only available if the negative criterion in par (a) is satisfied, namely that the scheduled waste facility is not a “scheduled waste disposal facility”. That term is also defined in cl 3(1) of the Waste Regulation, as follows:

scheduled waste disposal facility means a waste facility that is required to be licensed under the Act because it is used for the disposal of waste.

22. The definitions of waste facility and scheduled waste facility both encompass activities identified by the quintuple terms. However, as in subcl (4), the term “disposal of” may be separated and omitted, leaving the other four descriptors, or, as in the definition of scheduled waste disposal facility, “disposal of” may be used on its own.

23. Fourthly, in terms of the expressions used in cl 20(3), it was not in dispute that the appellant operated a facility which complied with the second criterion, in par (b). That is, the premises were a scheduled waste facility because an activity listed in cl 26 of Sch 1 to the Act was carried on at the facility. However, the appellant relied upon the nature of the activities prescribed in cl 26 as relevant to an understanding of what was meant by the phrase “disposal of waste” as it appears in both the generic concept of a “scheduled waste facility” and in the more limited concept of a “scheduled waste disposal facility”. Assuming the phrase has the same meaning in each definition, whatever activities fell within cl 26 could not involve “disposal of waste” because, if they did, qualification under par (b) in cl 20(3) would constitute a disqualification under par (a).

Reliance on Sch 1, cl 26

24. As will be explained shortly, there are other reasons for thinking that the exclusion in par (a) was not engaged in the present case, but the argument based on the operation of par (b) is supportive of that conclusion and should be addressed at this stage. For that purpose, it is necessary to have regard to the terms of cl 26 in Sch 1 to the Operations Act.

26   Metallurgical activities

(1)   This clause applies to the following activities—

aluminium production (alumina), meaning the refinement or processing of mainly alumina to produce aluminium products.

aluminium production (scrap metal), meaning the refinement or processing of mainly scrap aluminium to produce aluminium products.

iron or steel production (iron ore), meaning the refinement or processing of mainly iron ore to produce iron or steel products.

iron or steel production (scrap metal), meaning the refinement or processing of mainly scrap iron or steel to produce iron or steel products.

metal coating, meaning the coating of metal by any method (including spray painting, powder coating, enamelling, electroplating, anodising and galvanising, but not the coating of metal on vehicles or vessels).

metal processing, meaning the processing of metals by heating, rolling, melting or casting metal otherwise than in the course of some other activity to which this clause applies.

metal waste generation, meaning any activity that involves—

(a)    the refinement, processing or coating of metal, and

(b)    having on site any prescribed waste (that is, hazardous waste, restricted solid waste or liquid waste, or any combination of them).

non-ferrous metal production (ore concentrates), meaning the refinement or processing of mainly ore concentrates (including copper, zinc and lead ores, but not iron ore or alumina) to produce non-ferrous metal products.

non-ferrous metal production (scrap metal), meaning the refinement or processing of mainly scrap metal (including copper, zinc and lead, but not iron, steel or aluminium) to produce non-ferrous metal products.

scrap metal processing, meaning the crushing, grinding, shredding or sorting (but not smelting) of scrap metal of any kind.

(2)    Each activity referred to in Column 1 of the Table to this clause is declared to be a scheduled activity if it meets the criteria set out in Column 2 of that Table. ^[1]

1. The Table sets out volume and capacity requirements which do not bear on the construction issue.

25. The activities identified in the appellant’s licence under cl 26 were the second activity and the last activity listed in cl 26(1). However, the construction argument should take account of all the listed activities. Even by reference only to aluminium production (scrap metal) it is clear that the activity includes the processing of scrap aluminium to produce aluminium products, thereby transforming the scrap material into a new product. In the same vein, the processing of scrap iron or steel to produce iron or steel products also permits a transformation, including arguably transforming iron into steel, using waste materials. Similarly, although the precise scope of the activity is obscure, the reference to “metal waste generation” covers the activity discussed above which was engaged in by the appellant, namely burning some forms of non-metal wastes in the furnace in the course of processing scrap aluminium. Consistently with the appellant’s submission, it follows that the transformation of scrap material into another substance or product, and the destruction of waste in the course of processing metal, do not involve “disposal” of the waste which forms an input to the process.

26. That activities covered by cl 26 do not constitute disposal of waste was not challenged by the Authority. That was consistent with the Authority’s view that no contributions were payable under s 88 when the relevant scheduled activities were metallurgical activities, resource recovery and waste storage. Importantly, the argument casts doubt upon the proposition that destruction of waste material constitutes “disposal of waste”.

Waste Regulation, cl 20(3)

27. It is convenient then to turn to the language of the definitions of the facilities identified in cl 20(3). For the appellant’s facility to constitute a “scheduled waste disposal facility” it must be required to be licensed “because” it is used for the disposal of waste. If it were not so used before the expansion to include thermal treatment of waste, it must follow that the requirement that it be licensed to undertake that scheduled activity is because that activity involves the disposal of waste. To determine whether that is so, it is necessary to have regard to the terms of cl 40 of Sch 1 of the Operations Act (omitting the Table):

40    Waste disposal (thermal treatment)

(1)    This clause applies to the following activities—

thermal treatment of general waste, meaning the receiving of waste (other than hazardous waste, restricted solid waste, liquid waste or special waste) from off site and its processing by thermal treatment.

thermal treatment of hazardous and other waste, meaning the receiving of hazardous waste, restricted solid waste, liquid waste or special waste from off site and its processing by thermal treatment.

…

(3)    Each activity referred to in Column 1 of the Table to this clause is declared to be a scheduled activity if it meets the criteria set out in Column 2 of that Table.

(3A)    However, this clause does not apply to the destruction of drug exhibit waste if the activity is carried out in compliance with the following requirements—

(a)    the combustion chamber used for the destruction of drug exhibit waste and its casing is as airtight as reasonably possible,

(b)    during the destruction of drug exhibit waste in that combustion chamber, combustion gases within the chamber are at or above 850°C for a minimum of 2 seconds,

(c)    the plant used for the destruction is fitted with monitoring and control equipment to monitor and ensure compliance with paragraph (b) and that equipment is maintained in working condition and used during any destruction of drug exhibit waste,

(d)    drug exhibit waste is destroyed only if it is contained in bags made of polyethylene, or polypropylene, that is chlorine-free,

(e)    no more than 50 kilograms of drug exhibit waste is placed into, or otherwise contained in, the combustion chamber for destruction at any one time.

…

(5)    In this clause—

drug exhibit waste means any prohibited drug (within the meaning of the Drug Misuse and Trafficking Act 1985) that—

(a)    was collected, seized or confiscated by, or surrendered to, the NSW Police Force, and

(b)    is no longer required by the NSW Police Force.

28. The term “disposal” appears nowhere within the operative provisions of cl 40, but only in the heading to the clause. Pursuant to s 35(2) of the Interpretation Act 1987 (NSW) the heading to a section or clause does not form part of the Act or instrument. That is not to say that regard cannot be had to it as relevant extrinsic material; however, the appellant submitted that little weight should be given to the use of the word in the heading, given that subcl (1) identifies the scope of the operations covered, but does not include the word “disposal”, and the operative provision, subcl (3), does not use that term. On that view, the relevant scheduled activities did not require licensing of the appellant’s premises “because” the premises were used for the disposal of waste.

29. This reasoning is further developed below by Preston CJ of LEC in terms with which I agree.

30. The only escape from the logic of this conclusion is that “processing by thermal treatment” destroys the waste, and destruction therefore involves the disposal of waste.

31. The primary judge accepted the last proposition, but the reasoning behind the conclusion was unpersuasive. That reasoning commenced with the proposition that “disposal of” is not a defined term and therefore carries its ordinary English meaning. Ordinary English usage includes the meaning “got rid of” and that would include by destruction.

32. The key steps in the reasoning should not be accepted. First, because a term is undefined in a statute or regulation, it does not follow that it has the same usage as in ordinary speech. Indeed, the meaning intended in ordinary speech can only be identified by reference to its use in a particular sentence, in a particular context. The present context is a legal document, namely a regulation made under an Act of Parliament. How it is used in that instrument must depend on a careful analysis of the surrounding text and context.

33. Secondly, as this Court has warned on many occasions, reference to dictionaries to determine the meaning of statutory language can only assist in identifying the range of possible meanings. To determine the actual meaning, it is necessary to return to the context, and particularly the text of the statute. Indeed, dictionaries demonstrate that the term “dispose of” has more than one meaning, so that choice will be arbitrary unless the word is construed in its statutory context.

34. Thirdly, whether by reference to a dictionary definition or not, the replacement of the statutory phrase with a colloquialism, such as “got rid of”, is apt to distract attention from the way in which the statutory term has been used.

35. A preferable approach involves the following steps. First, the use of the quintuple statement of activities in the definition of “waste facility” suggests a progressive set of activities, though not necessarily in the specific order in which the terms appear. But the first four activities must precede the fifth (disposal). Thus, storage and sorting may take place at any time before disposal, though not after. Similarly, processing and treatment must precede disposal. There is no clear distinction between the terms processing and treatment, and they may well be used interchangeably in many cases. So much is suggested by the language of cl 40 which refers to “processing by thermal treatment”.

36. Significantly, cl 40 uses two terms which appear in the definition of a waste facility and a scheduled waste facility, but do not use the term “disposal of”. Accordingly, reading the language of the definitions in their own terms, the requirement for a licence does not arise under cl 40 because the facility is used for the disposal of waste, but rather because it is used for treatment and processing. On that reading, the definition of “scheduled waste disposal facility” is not engaged.

37. Secondly, there is logic in resisting the implication that waste is disposed of by processing or treatment. Each definition in cl 40 (and elsewhere in the scheduled activities) commences with a separate activity, namely “the receiving of waste”. The activities do not involve waste which is created in the course of treatment or processing. Thus, when the definition of scheduled waste disposal facility refers to “disposal of waste”, it is referring to that which is received at the facility, not that which results from treatment or processing. On the other hand, it is clear that the quintuple activities distinguish between treatment and processing (and storage and sorting) on the one hand, and “disposal” on the other. While there may be overlap between some terms, the use of the disjunctive “or” in the definition of scheduled waste facility suggests that the concept of disposal is separate from the other concepts. As noted above at [22], this conceptual separation is reflected in other provisions.

38. Thirdly, even if treatment leading to destruction could, in the abstract, satisfy the description of “disposal of waste”, such a reading would be inconsistent with the use of the term “disposal of waste” in the definition of scheduled waste disposal facility, to the exclusion of the other activities. If that were the intended reading, it would be necessary to understand it as “disposal, including by treatment and processing which destroys the waste”. Rather, the use only of the term “disposal of” which is found in the broader definition (of scheduled waste facility), without reference to other activities, including treatment or processing, militates against the adoption of the broader understanding of the definitions.

39. Finally, as already noted, it is common ground that such destruction as occurs in the course of metallurgical activities, and the necessary transmogrification of waste material which can occur in the course of metallurgical activities, does not involve “disposal of waste” for the purposes of the definition of scheduled waste disposal facility. Consistently, such activities should not fall within that term when undertaken pursuant to cl 40.

Conclusion

40. For these reasons, the appellant’s contention that its activities pursuant to cl 40 of Sch 1 to the Operations Act did not impose a requirement to be licensed “because” those activities involved the disposal of waste should be accepted. Although those activities required that it be licensed, the exemption in cl 20(3) of the Waste Regulation was engaged and the obligation to pay contributions under s 88 of the Operations Act was not engaged.

41. The Court should make the following orders:

1. Allow the appeal and set aside the orders made in the Land and Environment Court on 17 November 2021, entered on 18 November 2021.

2. In place of those orders:

1. Declare that Weston Aluminium Pty Ltd is exempt from the requirement to pay contributions under s 88 of the Protection of the Environment Operations Act 1997 (NSW) in respect of the scheduled activities undertaken at its Kurri Kurri premises.

2. Order that the Environment Protection Authority pay Weston Aluminium’s costs of the trial.

3. Order that the respondent Authority pay the appellant’s costs in this Court.

42. PRESTON CJ of LEC: Weston Aluminium Pty Ltd (Weston) appeals against the decision of the primary judge that the waste facility carried on at its premises was a “scheduled waste disposal facility” as that term is defined in cl 3(1) of the Protection of the Environment Operations (Waste) Regulation 2014 (NSW) (the Waste Regulation). The consequence of the primary judge’s finding was that Weston was not exempt under cl 20(3) of the Waste Regulation from the requirement to pay a contribution to the Environment Protection Authority (EPA) under s 88 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act).

43. I would uphold Weston’s appeal for the reasons given by Basten AJA, to which I add the following reasons.

44. Clause 20(3) of the Waste Regulation exempts an occupier of a scheduled waste facility from the requirement to pay contributions to the EPA under s 88 of the POEO Act if:

“(a) the facility is not a scheduled waste disposal facility, and

(b) the facility is a scheduled waste facility because an activity listed in clause 26 (Metallurgical activities) of Schedule 1 to the Act is carried on at the facility.”

45. In the present case, a number of matters are agreed between the parties. First, it is agreed that Weston’s premises are a “waste facility”, as defined in the Dictionary to the POEO Act, in that the premises are “used for storage, treatment, processing, sorting or disposal of waste”. The waste includes pharmaceutical waste and illicit drug waste that is incinerated in a furnace at the premises.

46. Secondly, it is agreed that the pharmaceutical waste and illicit drug waste is waste within paras (b) or (c) of the definition of “waste” in the Dictionary to the POEO Act.

47. Thirdly, it is agreed that the waste facility operated by Weston is a “scheduled waste facility”, as defined in cl 3(1) of the Waste Regulation, in that the waste facility “is required to be licensed under the Act because it is used for the storage, treatment, processing, sorting or disposal of waste.” Weston carries on at the premises a variety of activities in relation to waste, answering one or more of the activities of “storage, treatment, processing, sorting or disposal of waste”, which trigger the requirement in s 48(1) of the POEO Act. That subsection applies to “scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.” A “scheduled activity” simply means “an activity listed in Schedule 1” (Dictionary to the POEO Act). Schedule 1 to the POEO Act lists the activities for which a licence is required. It is agreed that Weston’s waste facility carried on at the premises by Weston involves a number of the activities listed in Schedule 1, including an activity listed in cl 26 (Metallurgical activities) and in cl 42 (Waste storage). The waste facility is therefore required to be licensed in order for Weston to carry on these activities at the premises.

45. Fourthly, it is an agreed fact that an activity listed in cl 26 (Metallurgical activities) of Schedule 1 to the POEO Act is carried on at Weston’s facility, satisfying para (b) of cl 20(3) of the Waste Regulation.

46. The critical question under para (a) of cl 20(3) is whether Weston’s facility “is not a scheduled waste disposal facility”. A “scheduled waste disposal facility” is defined in cl 3(1) of the Waste Regulation to mean “a waste facility that is required to be licensed under the Act because it is used for the disposal of waste.” This definition selects one of the five activities in relation to waste that can cause premises to be used as a “waste facility”, being the disposal of waste, and requires that the use of the waste facility for that activity be the reason for the waste facility being required to be licensed under the POEO Act.

47. As I have noted, a licence is required for premises at which a scheduled activity, being an activity listed in Schedule 1 to the POEO Act, is carried on. Having regard to the definition of “scheduled waste disposal facility”, this means that a licence is required for premises at which a waste facility is carried on because the use of the waste facility for the disposal of waste is an activity listed in Schedule 1.

48. An illustration would be where the use of a waste facility for the disposal of waste is an activity listed in cl 39 (Waste disposal (application to land)). The disposal of waste received from offsite by application of the waste to land at the premises, by any of the methods specified in cl 39(1), will require the waste facility to be licensed “because it is used for the disposal of waste”. That is not an activity carried on at Weston’s premises, but it illustrates how the definition of “scheduled waste disposal facility” can operate.

49. In the present case, the only candidate activity listed in Schedule 1 advanced by the EPA as being an activity for which a licence might be required if the activity were to be carried on at Weston’s premises, is the activity listed in cl 40 (Waste disposal (thermal treatment)). Clause 40 applies to two activities, thermal treatment of general waste and thermal treatment of hazardous and other waste. Each activity is defined in cl 40(1). Clause 40(3) provides that each activity, referred to in Column 1 of the Table to the clause, is declared to be a scheduled activity if it meets the criteria set out in Column 2 of that Table. As cl 1(1) of Schedule 1 to the POEO Act provides, an activity declared to be a scheduled activity is taken to be an activity for which a licence is required for the premises at which it is carried out.

50. In the present case, it is agreed that only the activity of thermal treatment of hazardous and other waste is relevant. This activity is defined in cl 40(1):

“thermal treatment of hazardous and other waste, meaning the receiving of hazardous waste, restricted solid waste, liquid waste or special waste from off site and its processing by thermal treatment.”

54. As noted in Environment Protection Authority v Grafil Pty Ltd (2019) 238 LGERA 147; [2019] NSWCCA 174 at [188], it is the activity defined in the clause, here cl 40(1), and declared to be a scheduled activity, here cl 40(3), that is taken to be an activity for which a licence is required for the premises at which it is carried out (cl 1(1) of Schedule 1).

55. In the present case, the waste received from offsite, including the pharmaceutical waste and illegal drug waste, is agreed to be “hazardous waste, restricted solid waste, liquid waste or special waste” for the purposes of the definition of “thermal treatment of hazardous and other waste”. The definition requires “its processing by thermal treatment” in order for the activity carried on at the premises to be “thermal treatment of hazardous and other waste.” The “processing” of the waste is one of the activities that can cause premises to be used as a waste facility or scheduled waste facility. The “thermal treatment” of waste is defined in cl 50(1) of Schedule 1 to the POEO Act to mean “the processing of wastes by burning, incineration, thermal oxidation, gasification, pyrolysis, plasma or other thermal treatment processes.” The “treatment” of waste, whether thermally or otherwise, is another of the activities that can cause premises to be used as a waste facility or scheduled waste facility.

56. The upshot is that it is only the “processing” by “thermal treatment” of waste of the kind referred to in the definition that will be the activity of thermal treatment of hazardous or other waste. It is this activity that is declared to be a scheduled activity for which a licence is required.

57. Of importance in answering the question of whether Weston’s waste facility is a scheduled waste disposal facility, is that an activity cannot be the activity of thermal treatment of hazardous and other waste as defined in cl 40(1) because of the disposal of waste. The definition of the activity of thermal treatment of hazardous and other waste requires the “processing by thermal treatment” of the waste, not the disposal of the waste. The use of a waste facility for the disposal of waste will not satisfy the definition.

58. As a consequence, a waste facility used for the disposal of waste will not be required to be licensed by reason of being an activity listed in cl 40 of Schedule 1 to the POEO Act. The waste facility will not be a scheduled waste disposal facility within the definition of that term in cl 3(1) of the Waste Regulation.

59. In this circumstance, it matters not whether the waste facility operated by Weston at its premises can be said to be used for the disposal of waste. The incineration of the pharmaceutical waste and illegal drug waste in the furnace at the premises may or may not be able to be described as the disposal of waste. What does matter is that any disposal of waste that might occur is not an activity that is required to be licensed by being an activity listed in cl 40 of Schedule 1 to the POEO Act. That is dispositive of the question of whether the waste facility operated by Weston is a scheduled waste disposal facility.

60. For these reasons, supplementing the reasons of Basten AJA, the primary judge erred in finding that Weston’s waste facility was a scheduled waste disposal facility and that the exemption in cl 20(3) did not apply.

61. I agree with the orders of Basten AJA.

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Endnote

Decision last updated: 17 November 2022