Major Court Ruling Redefines Asbestos Waste And Obligations Under Resource Recovery Exemptions

A major Court ruling, handed down on August 2, 2019, will impact on recyclers in NSW, particularly those dealing with construction and demolition (C&D) waste, those that may have exposure to asbestos risks, and all parties dealing with resource recovery exemptions – including consumers and transporters.

The NSW Court of Criminal Appeal (CCA) overturned an earlier Land and Environment Court (LEC) decision regarding waste-related legislation in NSW, and in doing so, has redefined how the meanings of “waste” and “asbestos waste” are understood, and obligations related to resource recovery exemptions under NSW environmental legislation. The decision means that the courts have now endorsed a zero-tolerance approach to the presence of asbestos in waste, and is likely to have serious consequences to the recycling industry – especially C&D recycling.

The NSW Environment Protection Authority (EPA) succeeded on all grounds in Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2019], overturning almost all of the original findings of Justice Pain in Environmental Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99.

Background

The defendants, Grafil Pty Ltd and its director, owned a property in NSW. Grafil accepted thousands of tonnes of material from a number of recyclers for the building of an access road. That material was supplied under two resource recovery exemptions (which are exemptions that allow waste to be reused without the normal licensing requirements etc, if the generator has first carried out required testing, and certified that the material meets the relevant chemical and other criteria).

Grafil received material over a period of months, always with a certificate from reputable recyclers stating that the material had been tested, met all requirements, and therefore fell under resource recovery exemptions. However, when the EPA attended the site (months after some material had been received), it tested a range of stockpiles, and alleged that some of the material did not meet the relevant criteria, and moreover, since limited amounts of asbestos had been located (634.64 grams in 44,000 tonnes – representing some 0.000000014 percent), not only did the material not fall under the exemptions, but it was “asbestos waste”.

The EPA prosecuted Grafil for unlawfully using its land as a waste facility without a licence – an offence under the Protection of the Environment Operations Act 1997 (POEO Act).

In the Land and Environment Court, Justice Pain found Grafil and its director not guilty. This turned on a number of key points, three of which were the subject of the appeal – firstly, she found that the material was not “waste” under the POEO Act. Secondly, she found that the material was not “asbestos waste”. Finally, she held that since it is the generators that are required to carry out testing, it would be an unfair and unreasonable operation of our laws to hold the consumers of that material criminally liable if it turned out not to meet the criteria.

In a highly technical decision, but one with big implications, the Court of Criminal Appeal roundly overturned Justice Pain’s decision – and in doing so, changed the landscape for waste in NSW.

Is the material “waste”?

Under the POEO Act, “waste” is defined in the following way: “waste includes…(a)…, or (b)…., or (c)…., or (d)….”. In the LEC, Grafil successfully argued that the use of “or” between the sub-definitions to “waste” meant that the definition is fairly narrow, as it can only fall within one, or the other sub-definition – but not both. This narrower meaning would mean that in some cases it would be uncertain if material was actually waste – and therefore, whether the POEO Act applies at all.

However, the CCA disagreed. It stated that the definition of “waste” is intended to be wide – and so, the word “or” is actually to be read “and/or” – that is, it can fall within one, or many sub-definitions.

The upshot is that if it walks, talks, and quacks like a duck – then it’s waste. If there is ever any doubt whether material may or may not be waste, this judgment means that it is safest to assume that it is waste.

Is it “asbestos waste”?

Possibly the most controversial aspect of the judgment, and with far-reaching consequences, is how the court approached the meaning of “asbestos waste”.

Under the POEO Act, “asbestos waste” is defined as “any waste that contains asbestos”. This definition is unfortunately extremely vague – there is no suggestion as to how much asbestos deems an entire stockpile or load as asbestos waste.

The NSW EPA has always adopted a zero-tolerance approach – any asbestos presence, even a microscopic amount, means that the entire stockpile/load is “asbestos waste”. This has serious implications, as a stockpile of, say, 1,000 tonnes of recyclable material with 0.2mg of asbestos would need to be disposed of as asbestos waste instead of being recycled/reused.

In the LEC, the trial judge adopted a pragmatic approach in stating that it is a matter of fact and degree in each case – that is, it would depend on the particular circumstances, such as the source, nature and volume of the waste in question.

The CCA overturned this. It held that if any amount of asbestos is present whatsoever – then the entire load/stockpile is classified as asbestos waste. Again, it is worth noting that the amount of asbestos discovered in the bulk samples in this case was 634.64 grams, representing an “incredibly minor” (per Justice Pain) amount in comparison to the per estimate of 44,000 tonnes of materials in the stockpiles – amounting to 0.000000014 percent of all material.

This has significant implications for the exposure of recyclers, transporters and others in the waste industry to asbestos risks. The industry now has to assume that the presence of even a fraction of a percent can deem an entire load of waste to be “asbestos waste” – and manage the risks accordingly. This includes re-examining due diligence and testing regimes, contamination and rejection clauses under contracts, protocols for checking and rejecting loads, as well as environmental insurance.

Are consumers to be liable?

The CCA did not explicitly look at the specific issue of whether it is a fair use of our criminal laws to make “innocent” consumers liable when they receive certificates stating that material has been tested, and meets all relevant criteria under a resource recovery exemption. But this is the implication of its decision – even an innocent consumer who has done all that is required of them under the POEO Act by ensuring that all material is supplied with certificates certifying that the material has been tested and meets the requirements of a resource recovery exemption – can nonetheless be criminally prosecuted, and/or ordered to remediate the site and dispose of the material at great cost – notwithstanding that it was the generator, not the consumer who was actually at fault.

This has significant implications for the resource recovery industry. If consumers receive no real protection by fulfilling their obligations to receive certificates, then will those consumers continue to receive material under resource recovery exemptions at all? And if these risks dampen enthusiasm for the resource recovery exemption – where is the material to go?

Watch this space

This decision means that the regulatory regime for waste in NSW has become tougher, and risks to all in the industry, as well as consumers, have increased – at an especially difficult time for the industry. However, Grafil may appeal the decision to the High Court of Australia – which would settle some of these issues once and for all.

Gavin Shapiro is a partner at Hones Lawyers. He specialises in the waste industry, including waste contracts, waste legislation, EPA investigations and prosecutions, and operational issues.


Developers and Off-the-Plan Buyers

Developers and Buyers for Off-the-Plan properties, check these important changes to the conveyancing laws passed by the State government in November. The new laws bring in stronger protection for purchases who buy property off-the-plan, and also impose on developers greater obligations for disclosure. A link to the Registrar General’s page noting some of the changes, as well as expansions to electronic land transactions is:

https://www.registrargeneral.nsw.gov.au/news/changes-to-conveyancing-laws-off-the-plan-and-electronic-contracts

This is worth a read.

Key elements of the disclosure for off-the-plan contracts is the need for:

  • A copy of the proposed plan of the building as well as details of easements and covenants;
  • For strata and community properties, the proposed by-laws;
  • A schedule of finishes where building work is required as part of the contract.

5 Common Misconceptions People Have When There’s A New Development On The Block

He who cannot put his thoughts on ice should not enter into the heat of dispute.” – Friedrich Nietzsche

There are few things that get people more hot under the collar than a new development proposed next door.  Whether it’s a single dwelling, a block of apartments or a commercial use, even Nietzsche would probably have had difficulties keeping his emotions in check if he felt that his lifestyle was about to be altered – for the worse – by a new development in his street.

Whether you’re the one carrying out the development or an existing resident who’s about to be impacted, it can be a turbulent time.  Feelings are fraught, tempers are frayed and neighbourly relations can quickly sour when the spectre of development rears its much-maligned head within a stone’s throw of someone’s treasured home and castle.

It’s a common situation that’s happening almost every day on any street in any suburb.  So you’d think that, by now, everyone would be reasonably clear about the rules and regulations that apply.  But, judging by the inquiries we receive, the matters we act in and the cases decided by the courts, there are still many myths, misconceptions and misunderstandings about what the legal position actually is whenever new development is proposed.

Here are 5 of the most common areas of confusion that we encounter as property, local government and town planning lawyers:

  1. If a council approves development a neighbour has a right of appeal

This is a prevalent belief that is the cause of unnecessary anxiety on the part of someone planning to construct a new building and gives false hope to neighbours.  As a general rule, only the person who lodged the development application can appeal from the decision of the council.  There are a few very limited circumstances (for certain specified types of development) in respect of which a neighbour has a right of appeal if the council approves a development, even if it is next door.

  1. A neighbour is entitled to input into the design of an adjoining development

While neighbours can certainly lodge their objections with the council, their opinions and preferences will not necessarily prevail, even if negative impacts can be demonstrated.  The council is required to take the objections into consideration but can decide not to implement the requested amendments.

  1. If a development does not comply with the council planning controls it will be refused

Not so.  The planning system in New South Wales incorporates a level of flexibility which means that strict compliance with all development standards is not necessary.  Even if there are a number of non-compliances with planning controls, while in some situations this may be indicative of an unsuitable development design the number of non-compliances is not, of itself, determinative.  In assessing the proposal, it’s necessary for the council to take into consideration the nature and extent of each of the non-compliances and the impacts which flow from them.

  1. If a design change would reduce or remove an impact then the council must require it to be done

Sometimes, a relatively minor change to a design would have the effect of diminishing or removing completely an impact on an adjoining home.  While it might make a lot of sense to do this, the council is not under a duty to require that change to be made.

  1. Once a development has been approved there is nothing that the neighbours can do

In very limited circumstances, legal proceedings can be commenced to have a development consent declared invalid.  On its face, this appears to contradict the first point which states that there is no right of appeal for neighbours.  However, this is not the same as a right of appeal.  In order to succeed in proceedings of this nature, you must be able to establish that there was a legal flaw in the approval process.

Whenever change is proposed, it’s understandable that people can become concerned about what the possible impacts might be.  But, as with any situation where there are conflicting interests, it’s essential to properly understand the facts and know your rights before you make any decisions.

Whether you’re a developer, a neighbour or a concerned local resident, no matter which side of the fence you’re sitting on, it’s always important to know where you stand.

This article does not constitute legal advice.

Susan Hill, Special Counsel with Hones Lawyers, is an Accredited Specialist in Local Government & Town Planning Law.  She has been a solicitor for over 30 years, with extensive experience in Land and Environment Court matters.


5 reasons you should see a lawyer

5 Reasons You Should See a Lawyer

For a big percentage of people, when they think about lawyers they instantly link them to problems.  But if you’ve got a development project in the pipeline then early engagement with your legal team could add even more value to your bottom line.

If you predicted that most people would rate the enjoyment factor of a visit to a solicitor’s office at about the same level as a trip to the dentist then you’d be on a pretty safe bet!

A glance into our waiting room on any day of the week would quickly confirm why there’s such a negative mindset out there.  Nine times out of ten, clients are sitting in our offices because they’ve encountered a legal situation that’s just about guaranteed to be nothing more than a long, drawn-out headache.  They’re focused on the day that it will finally be finished so that they can leave it behind them and get on with their lives.

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Strata Report – New Laws

Both the Strata Schemes Management Act 2015 No. 50 and the Strata Schemes Development Act 2015 No. 51 were assented to on 5 November 2015. These bills have far reaching impact on unit owners and developers dealing with unit owners. Hones Lawyers are presently preparing an outline template in for use by owners and developers. The full details and forms will not be completed until the regulations of those acts have been finalised.

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Group Sales by Multiple Owners

We have been approached by groups of property owners who have decided that the sale of a number of adjoining lots would yield far better return than the sale of individual lots. We have prepared templates and agreements for this form of sale. If you are thinking of this type of arrangement, then you should see the expert team at Hones Lawyers who can prepare documents and give you advice and assistance on both the commercial and the planning aspects of your matter.

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Must Read 'Council News'

IMPORTANT Council News

There have been some big changes in law which will effect all local councils, please read these 6 significant items or contact your Hones Lawyers representative so we can explain why these are significant changes.

Costs in S.56A appeals treated the same way as costs in normal Class 1 appeals

The tide on costs in s56A appeals has turned. The Court has recently held that the usual rule, that there be no order as to costs in Class 1 appeals, applies to s56A appeals.
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Case Spotlight 'We Make History'

Hones Lawyers secure the largest fine in NSW LEC history!

Liverpool City Council v Maller Holdings Pty Ltd (No.2) [2015] NSW LEC 48

The Situation

The Defendant, Maller Holdings Pty Ltd, carried on business under the name “Sydney Horse Transport” on and from a property located at Warwick Farm in Sydney. Commencing in the 1960s, various development consents had been granted under relevant environmental planning instruments authorising the use of the property for “stables”.
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