Land and Environment Court New South Wales Medium Neutral Citation: JET Group Australia Pty Ltd v Environment Protection Authority [2024] NSWLEC 1532 Hearing dates: 6-7 June 2024; final submissions on 20 June 2024 Date of orders: 29 August 2024 Decision date: 29 August 2024 Jurisdiction: Class 1 Before: Dixon SC Decision: See Directions at [64] below Catchwords: APPEAL – Protection of the Environment Operations Act 1997, s 287 – suspension of environment protection licence Legislation Cited: Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979, s 39(2) Protection of the Environment Administration Act 1991, s 6 Protection of the Environment Operations Act 1997, ss 42, 43, 44, 45, 70, 79, 81, 287, 299, 300; Ch 3; Sch 1 Pt 1 Protection of the Environment Operations (General) Regulation 2022, cl 153 Protection of the Environment Operations (Waste) Regulation 2014, cl 92(3) Cases Cited: Australian Wildlife Ark Limited v Secretary, Department of Planning and Environment [2023] NSWLEC 139 Environment Protection Authority v Crush and Haul Pty Ltd; Environment Protection Authority v Cauchi [2022] NSWLEC 113 Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 Texts Cited: Financial Assurance Policy (2022) Estimating financial assurances: Guideline on Independent Assessment of Costs (2022) Resource Recovery Order: The Mulch Order 2016 Resource Recovery Order: The Pasteurised Garden Organics Order 2016 Category: Principal judgment Parties: JET Group Australia Pty Ltd (Applicant) Environment Protection Authority (Respondent) Representation: Counsel: M Seymour (Applicant) J Reid (Respondent) Solicitors: Keypoint Law (Applicant) Environment Protection Authority (Respondent) File Number(s): 2023/174985 Publication restriction: Nil JUDGMENT Background 1. JET Group Australia Pty Limited (JET Group), holds an Environment Protection Licence (EPL No. 21027) (the Licence) under the Protection of the Environment Operations Act 1997 (the POEO Act). 2. The Licence, granted by the Environment Protection Authority (EPA) on 29 June 2018, authorises the carrying out of "composting", "resource recovery" and "waste storage" activities (as each of those terms is defined in Sch 1 of the POEO Act), on land located at 76 Nomad Road, Toronto NSW, being Lot 91 in DP 755207 (the Premises). 3. On 12 May 2023, the EPA issued a notice pursuant to s 79(2) of the POEO Act for the suspension of the Licence (Suspension Notice) due to JET Group's non-compliance with certain conditions of the Licence (s 79(5)(b)), and other matters arising from s 45 of the POEO Act. The Suspension Notice provides as follows: "40. The EPA considers it appropriate to suspend the Licence under s 79(2) of the Act for …. a. The multiple breaches to the Licence observed by EPA authorised officers during inspections on 5 May 2022, 27 September 2022 and 8 December 2022 in relation to conditions L3.1, O5.1, O5.3, O5.14, O5.28, E1.2(c), E1.2(d), M2.1, M2.2, R1.1 and R4.3. b. The EPA believes that pollution is both occurring and likely to be occurring as a result of the breaches to the Licence. The breaches are of considerable concern environmentally. In particular, the ongoing receipt and storage of organic waste and wood waste in circumstances where the Licensee has not implemented appropriate leachate and stormwater controls is of considerable concern. c. The EPA believes that the Licensee no longer has development consent to accept waste, materials, or any other products at the Premises. d. The suspension of the Licence and the works required to be carried out under the conditions of the suspension are a practical measure to control and mitigate pollution, including from organic waste stored in an unlined area, storage of leachate in an unlined and undersized dam. The suspension of the Licence will enable protection of the environment from potential harm and pollution impacts." (Class 1 application Ex F; Respondent's closing submissions (RCS) dated 13 June 2024 at par 11) 1. JET Group accepts that it has contravened the conditions of the Licence and that suspension of the Licence is appropriate (Record of inspection on 5 May 2022 at par 31/Tab 20). It also concedes, on the evidence of its environmental expert, Ms Fiona Keserue-Ponte, that pollution has occurred at the Premises, and it is possible or likely that the contamination detected in "W3" is at least in part, attributable to the former uncontrolled landfill and prior composting activity carried out upgradient of the Leachate Pond on the Premises (Ex H pp 2-9). JET Group also acknowledges that required payments of financial assurances were not paid and that reports on monitoring data were not provided in the time prescribed. 2. The activities covered by the Licence have now ceased at the Premises and JET Group has confirmed that those activities are not intended to be carried out while it pursues a modification of its development consent (the Consent) and takes steps to secure longer tenure of the Premises. The appeal 1. In appealing against the Suspension Notice under s 287(1), JET Group seeks to agitate the terms of the conditions of the suspension that may be imposed by such notice in accordance with s 287(2) of the POEO Act. 2. Shortly stated, JET Group contends that the appropriate objective of a condition on a suspension is to deal with historic or legacy issues of environmental concern arising from the licenced activity, which has been suspended. It takes issue with the conditions imposed under par 45 of the Suspension Notice and contends that they depart from the statutory requirements in s 79(3) of the POEO Act as they do not nominate a suspension "for a specific period" or "until further order". Instead, the Suspension Notice orders the suspension until notice of the satisfaction of the EPA to the fulfilment of specified conditions. 3. JET Group invites the Court to correct this error by imposing a fixed "period" (Applicant's closing submissions (ACS) at par 58) and proposes a 4-year fixed timeframe which it submits would allow JET Group time to modify its Consent and secure a 10-year lease of the Premises and enable: 1. the carrying out of requisite record keeping (in line with the 4-year period in other conditions under the suspended Licence); 2. further bioremediation of the historically low-level contaminant to continue to occur on the Premises; 3. an opportunity for the company to address any risk with the dam stability; and 4. pursue future operations concerning waste receipt for pasteurisation and stormwater disposal as a tandem process under the Consent. 5. (ACS pars 58-62) 1. JET Group submits that it would be of assistance to the parties if the Court could make findings on three discrete issues relating to: 1. the term of the suspension; 2. a prohibition on receipt of waste; and 3. imposition of conditions providing for financial assurances. 1. The EPA generally agrees with JET Group's framing of the main issues I need to address, albeit in slightly different terms (RCS at par 3). 2. In inviting me to determine these issues, the parties accept that by operation of s 39(2) of the Land and Environment Court Act 1979 (Court Act), the Court has all the functions, and discretions that the EPA had in respect of the imposition of conditions on a suspended licence. In that regard, Ch 3 of the POEO Act sets out the statutory provisions relating to EPLs, including the issue of EPLs and how they are otherwise dealt with (s 42). In addressing these issues, the well settled legal principles in respect of the interpretation of an Act are relevant to my construction of the provisions in Ch 3 (Respondent's opening submissions (ROS) at par 13). 3. That said, as the EPA observes, there is a fundamental difference between the parties in respect to the statutory purpose of a suspension notice, and the breadth of the power to impose conditions under s 81 of the POEO Act. Specifically, whether that power extends to the control of unscheduled activities (waste below the threshold of a Premises-based activity in Pt 1 of Sch 1 of the POEO Act). 4. As already identified, the power to impose conditions is set out in s 81 of the POEO Act. The section provides as follows: 81 Conditions of suspension, revocation or surrender (1) A licence may be suspended or revoked, or the surrender of a licence may be approved, unconditionally or subject to such conditions as the appropriate regulatory authority imposes. (2) Those conditions may include (but are not limited to) any conditions to which the licence was subject immediately before it was suspended, revoked or surrendered. (3) The appropriate regulatory authority may, by notice in writing given to the former holder of the licence, attach new conditions to, or vary or revoke any existing conditions of, the suspension, revocation or surrender of the licence. Note— Section 64 makes it an offence to breach conditions under this section. The Consent 1. The Consent for the resource recovery facility (composting), the subject of JET Group's modification application, was granted by the Court on 18 February 2016. Condition 15 of the Consent required that the development be carried out in four stages: "15. Construction Staging The development shall be implemented generally as shown in the approved construction staging plan prepared by Northrop dated 25 November 2015 reference CMP01, CMP02, CMP03 and CMP04 and consist of the following: a. Stage 1 – Installation of diversion swales and bunds and construction of temporary sediment basin. b. Stage 2 – Decommissioning of the existing main leachate collection dam and reconstruction. c. Stage 3 – Installation of barrier liner system within the works area. d. Stage 4 – Completion of biofiltration system, water course realignment and site reinstatement and revegetation. Prior to commencement of construction of Stages 2, 3 and 4 and on completion of Stage 4, the proponent shall provide to Council written certification from Northrop or other suitably qualified consultant as to the satisfactory completion of the prior stage in accordance with the approved plans. However, to the extent necessary to minimise the risk of an environmental event, Stage 4 may commence prior to the completion of Stage 3, provided that the relevant barrier liners are installed and certified." 1. Condition 5 of the Consent sets out a timeframe, for the staged works and a consequence in the event of non-compliance. It provides as follows: "5. The proponent must complete Stage 4 of the works within eighteen months of the date of this consent, subject to any written extension of this period by Council. If the works are not completed within this time, then no waste, materials, or any other products, shall be accepted at the land (Lot 91 Deposited Plan 755207), until such time that works are completed." 1. As it happened, the Stage 4 works were not completed within 18 months of the date of the Consent (17 August 2017), and the works have still not been completed. 2. In that circumstance, the EPA believes that Condition 5 operates so that "…no waste, materials, or any other products, shall be accepted at the Premises, until such time as the Stage 4 works are completed". This outcome under the Consent, it is submitted, in part informed the EPA's consideration of the terms of the Suspension Notice which includes a condition to preclude the receipt of any waste at the Premises while the Licence is suspended and "… until (JET Group) takes appropriate action". (The EPA submits that s 79(5) of the POEO Act is not an exhaustive list of considerations and that it was open to the authority to take into consideration the fact that JET Group has not been carrying out the development in accordance with its conditions and nor has the Consent been modified. 3. The "… appropriate action" required to release the suspension is detailed in par 45 of the Suspension Notice which provides as follows: "45. Pursuant to Section 79 and Section 81 of the Act the EPA makes the following orders: 1. The EPA suspends Environment Protection Licence No 21027, until: a. the Licensee satisfies the requirements of conditions E1.2(c), E1.2(d), R4.3, O5.1, O5.3, O5.14 and O5.28 of the Licence to the satisfaction of the EPA, as confirmed by the EPA in writing, and b. the Licensee obtains development consent to accept waste, materials or any other products at the Premises (or alternatively, obtains written notification form the Lake Macquarie City Council that Stage 4 works have been complete or that the time for completion for the Stage 4 works has been extended). 2. The licensee must not receive any waste at the Premises while the Licence is suspended. …" (Emphasis added) (Ex F; see Annexure A to the Judgment for the balance of the orders in para 45 of the Suspension Notice) JET Group's position The receipt of waste 1. While emphasising the "extraordinary breadth" of the express terms of s 81, JET Group acknowledges that the exercise of that power is subject to some limitation including the requirement to act "reasonably" in the sense discussed by the High Court in Minister for Immigration and Citizenship v Li (2013) 249 CLR 332; [2013] HCA 18 (Li) at [138]. In that regard, JET Group submits that the reasonable use of the power must be based on "the standard indicated by the true construction of the statute" or in other words "…not discerned from one provision standing alone but from the subject matter, scope and purpose" of the entire Act (Li at [67]). 2. In accepting that a licence authorises pollution in and by its conditions (s 44(2)), for the activities carried out at the Premises (s 44(4)), and that the Licence is attached to a person, the holder, and not the Premises in the same way as a development consent, JET Group submits that the status of suspension, when imposed by the EPA is not intended to be "immutable". It submits that new or varied conditions can be imposed on a suspended licence at any time: s 81(3). It also contends that the suspended Licence can expressly include "any conditions to which the licence was subject immediately before it was suspended, revoked or surrendered": s 81(2). 3. JET Group contends that the suspension of a licence is not intended to operate as a full suspension of all authority to carry out any or all activities previously carried out. It submits that there is a clear statutory purpose for people, whether the holder of the suspended Licence or any other person, to be able to undertake activities on the Premises. The suspension is not intended to freeze or cease an activity and action because such inaction could well lead to a worse environmental outcome (Applicant's opening submissions (AOS) at par 20). 4. With that in mind, JET Group invites me to draw a distinction between "below threshold activities" and "scheduled activities", and not treat them as the same because to do so would be unreasonable. In making that submission, JET Group refers me to the reasoning in the decision of Australian Wildlife Ark Limited v Secretary, Department of Planning and Environment [2023] NSWLEC 139 (Australian Wildlife Ark) at [76]-[77] per Preston CJ wherein, the Court emphasised that regulatory and licensing regimes do not, generally, allow for prior unlawful conduct to prevent any grant of statutory authority to carry out conduct in the future. In that context JET Group has proposed the conditions it would like me to impose on the suspended Licence (Ex D). Conditions which will allow JET Group to carry out activity or activities that do not fall under the definition of a "Premises-based activity" in Pt 1 of Sch 1 of the POEO Act. An activity of that kind includes pasteurisation of green waste received at the Premises and processed under the Resource Recovery Order: the Pasteurised Garden Organics Order 2016 and/or the Mulch Order 2016 (Orders). JET Group submits that activities of that kind may be carried out at any premises without a licence due to cl 92(3) of the Protection of the Environment Operations (Waste) Regulation 2014 (ACS par 34). 5. JET Group's proposed draft conditions seek the removal of Conditions 3, 4 and 5 imposed by the EPA in its Suspension Notice, being conditions which it is agreed have now been fulfilled. In their place, JET Group seeks the inclusion of some of the recommendations made by the parties' experts in the joint report (Ex H). Tenure 1. The evidence is that JET Group has occupied the Premises under a month-to-month lease for about 20 years. That is the case, despite repeated efforts by Mr Jensen (the company's sole director) to negotiate a longer-term lease with the landowner (Tcpt, 7 June 2024, p 52(3-16); Statement of Damien Jensen dated 1 May 2024 at pars 5-8 and 10; Supplementary Statement of Damien Jensen dated 1 May 2024 at pars 6-8 and 54-55; Ex A at par 4). 2. Security of tenure for an extended period is relevant because JET Group maintains that compliance with the conditions of the Licence is commercially unviable in the absence of long-term tenure. Mr Jensen told the Court that he has been unable to obtain finance to undertake the works under the Consent because of the short-term lease of the Premises (Statement of Damien Jensen dated 1 May 2024 at pars 4-8). Financial assurances 1. In respect to Condition 6 of the Suspension Notice, which requires the payment of outstanding and ongoing financial assurances, JET Group contends that such a requirement is unreasonable. 2. Condition 6 of the Suspension Notice requires that the applicant satisfies the requirements of Conditions E1.2(c) and E1.2(d) by a specified date. Noting, as Condition E1.3 provides that the financial assurance is to be maintained during operation of the facility and thereafter until such time as the EPA is satisfied the Premises is environmentally secure. For ease of reference, the Licence condition is reproduced below. "E1.1 A financial assurance in the form of an unconditional and irrevocable and on demand guarantee from a bank, building society or credit union operating in Australia as "Authorised Deposit-taking Institutions" under the banking Act 1959 of the Commonwealth of Australia and supervised by the Australian Prudential regulatory Authority (APRA) must be provided to the EPA. E1.2 The financial assurance must be in favour of the Environment Protection Authority in the amount of $100,000 and provided to the EPA in accordance with the following stages: a. 1st payment/guarantee of $20,000, within 6 months from the date the licence is issued; b. 2nd payment/guarantee of $20,000, within 18 months from the date the first payment was due; c. 3rd payment/guarantee of $20,000, within 1 year from the date the second payment was due; d. 4th payment/guarantee of $20,000, within 1 year from the date the third payment was due; e. 5th payment/guarantee of $20,000, within 1 year from the date the fourth payment was due; The financial assurance is required to secure or guarantee funding for works or programs required by or under this licence. The financial assurance must contain a term that provides that any monies claimed can be paid to the EPA or, at the written direction of the EPA, to any other person. The licensee must provide to the EPA, along with the original counterpart guarantees, confirmation in writing that the financial institution providing the guarantees is subject to supervision by APRA. E1.3 The financial assurance must be maintained during the operation of the facility and thereafter until such time as the EPA is satisfied the premises is environmentally secure. E1.4 The EPA may require an increase in the amount of the financial assurance at any time as a result of reassessment of the total likely costs and expenses of rehabilitation of the premises. E1.5 The EPA may claim on a financial assurance under s303 of the POEO Act if a licensee fails to carry out any work or program required to comply with the conditions of this licence. E1.6 The financial assurance must be replenished by the full amount claimed or realised if the EPA has claimed on or realised the financial assurance or any part of it to undertake a work or program required to be carried out by the licence which has not been undertaken by the licence holder." 1. JET Group argues that there is simply no justification for such a payment disclosed in the Licence itself or in the "Background" section of the Suspension Notice. Moreover, in circumstances where the experts do not support the condition, and the Licence has been suspended, JET Group argues that financial assurances going to performance of the Licence is neither necessary nor reasonable. This is said to be even more so where JET Group intends to carry out a different activity at the Premises during the period of suspension, and there will be no reason to secure anything under Conditions E1.2(c) or E1.2(d). It is also contended that the imposition of Condition 6 to secure the performance of "other works" relating to stormwater or leachate controls is a "mistake" on the proper construction of the Licence. As any perceived deficiency in that regard raises the question as to why such financial assurances, already given, had not been called upon earlier to address that deficiency (ACS at pars 69-71). 2. Ultimately, JET Group contends that the imposition of the financial assurances as a condition of the suspension is inconsistent with the Financial Assurance Policy (2022) which adopts a risk-based approach (cl 2.3), where financial assurances are only "applied to medium or high-risk actions" (ACS at pars 72-73). Given the low-risk characteristics of JET Group's proposed waste stockpiles at the Premises - at below licence limits, the EPA's proposed financial assurances are said to be at odds with the Policy and there is no other evidence before the Court in respect of the application of any other part of the Financial Assurance Policy for estimating financial assurances to justify this condition: Estimating financial assurances: Guideline on Independent Assessment of Costs (2022), such that the Court could form the requisite state of satisfaction under s 299 or to do the necessary estimates under subss 300(1) and (2) of the POEO Act (noting that these Policy documents are said to be called up by cl 153 of the Protection of the Environment Operations (General) Regulation 2022) (ACS par 72). 3. Accordingly, in the absence of a clear reason for the imposition of Condition 6 – JET Group argues that the "works or programs required by or under this licence" secured by the grant of financial assurances can only be works or programs known at the time of the grant of the Licence. It could not be known at the relevant time that the programs or works deferred into the adoption of a Construction Environmental Management Plan (CEMP) (under Condition O5.2 were intended to be secured by Conditions E1.2(c) or E1.2(d)) would be "for construction of stormwater and leachate controls" such that the financial assurance given under Conditions E1.2(c) and E1.2(d) can be applied. While JET Group concedes that the EPA had power to alter Condition E1.2(c) or E1.2(d) at any time to endorse the works approved under the CEMP the fact is that did not happen (ss 58(1), (4) and (5)). The same argument is put in relation to Conditions 7 and 8 in respect to monitoring. The monitoring should only deal with legacy or historic impacts arising from the prior suspended licenced activity not the non-scheduled activity as only then is there a rational connection between suspension and the condition. The term of suspension 1. With respect to the term of the suspension, JET Group's final position, was - as stated earlier - for a specified fixed period of four (4) years. 2. The EPA agreed to a period of six (6) months - January 2025. 3. The 4-year fixed period was said to accommodate JET Group's present difficulties in (a) obtaining modification approval and (b) security of tenure and the statutory requirements in s 79 of the POEO Act. It was also submitted that the 4-year fixed period would overcome the "manifest inconsistency and irrationality in the proposed term put forward by the EPA which limits the period to January 2025 but imposes a raft of conditions requiring performance over 4 years". 4. The other changes to the Suspension Notice proposed by JET Group included: * Delete all "Background"; * Delete [1]-[8] and the EPA revisions to [1]-[8] to limit the term to January 2025 and/or maintain [2]; * Refer any remaining contest on conditions to the parties for agreement or a short timetable imposed for submissions on remaining conditions. It is suggested that the sensible starting point for discussion is the JET Group conditions which appear to be the minimal requirements that would be agreed: see [14] Respondent's Submissions. (ACS par 76(a)-(d)) The EPA's position 1. By the end of the hearing, the EPA agreed to amend the Suspension Notice to: "a. limit the time of the Suspension Notice to reflect a short, but reasonable, period of time (6 months) to secure a long-term tenancy over the Land as that is the only reason that the Director of the applicant, Mr Jensen, cites for the non-compliance with the conditions of the EPL; and b. reflect the passage of time since the issue of the EPL (by the amendment of compliance dates); and c. amend the conditions to reflect the reduced scope of analysis of groundwater agreed by the experts; and d. reduce the conditions to be complied with in the suspension period to enable the applicant to focus resources on securing the desired tenancy whilst balancing the likely impact on the environment in the short period." (RCS at par 5) 1. The EPA otherwise rejected JET Group's proposed conditions that would enable JET Group to "effectively put the licenced activities on pause", and continue to operate the Premises in a way not contemplated by the Licence, and with a view to JET Group electing when it wishes to re-activate the Licence (RCS at par 6). 2. It also rejected JET Group's submission, in the alternative, for a suspension notice period of four years on the basis that: "a. The company does not acknowledge the fact that some damage has occurred to the environment due to the historical operation of scheduled activities on the Land; and b. The company does not reflect the clear statutory intention of the Suspension Notice; and c. No cogent reason has been given for the extended Suspension Notice period; and d. The nomination of an extended 'term' for the Suspension Notice to operate might prejudice the respondent's position if it decides to rescind the EPL on the basis that the licensee no longer carries on the activities covered by the licence (s79(5)(d)), which has become apparent following the lay evidence filed in these proceedings." (RCS at par 6) 1. In support of its position, the EPA contended that the condition power in s 81, whilst broad, is constrained by ss 45, 79 of the POEO Act and s 6 of the Protection of the Environment Administration Act 1991 (POEA Act). Noting, s 45 of the POEO Act applies to the exercise of all licencing functions and imposes a mandatory requirement to consider certain matters. In this case, s 45(f1) of the POEO Act which provides as follows: 45 Matters to be taken into consideration in licensing functions In exercising its functions under this Chapter, the appropriate regulatory authority is required to take into consideration such of the following matters as are of relevance— … (f1) in relation to an activity or work that causes, is likely to cause or has caused water pollution— (i) the environmental values of water affected by the activity or work, and (ii) the practical measures that could be taken to restore or maintain those environmental values… 1. The requirement to consider the objectives of the EPA in s 6 of the POEA Act is also relevant: 6 Objectives of the Authority (1) The objectives of the Authority are— (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, and (b) to reduce the risks to human health and prevent the degradation of the environment, by means such as the following— • promoting pollution prevention, • adopting the principle of reducing to harmless levels the discharge into the air, water or land of substances likely to cause harm to the environment, • taking action in relation to climate change, • minimising the creation of waste by the use of appropriate technology, • regulating the transportation, collection, treatment, storage and disposal of waste, • encouraging the reduction of the use of materials, encouraging the re-use and recycling of materials and encouraging material recovery, • adopting minimum environmental standards prescribed by complementary Commonwealth and State legislation and advising the Government to prescribe more stringent standards where appropriate, • setting mandatory targets for environmental improvement, • promoting community involvement in decisions about environmental matters, • ensuring the community has access to relevant information about hazardous substances arising from, or stored, used or sold by, any industry or public authority, • conducting public education and awareness programs about environmental matters. (2) For the purposes of subsection (1) (a), ecologically sustainable development requires the effective integration of social, economic and environmental considerations in decision-making processes. Ecologically sustainable development can be achieved through the implementation of the following principles and programs— (a) the precautionary principle—namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by— (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and (ii) an assessment of the risk-weighted consequences of various options, (b) inter-generational equity—namely, that the present generation should ensure that the health, diversity and productivity of the environment are maintained or enhanced for the benefit of future generations, (c) conservation of biological diversity and ecological integrity—namely, that conservation of biological diversity and ecological integrity should be a fundamental consideration, (d) improved valuation, pricing and incentive mechanisms—namely, that environmental factors should be included in the valuation of assets and services, such as— (i) polluter pays—that is, those who generate pollution and waste should bear the cost of containment, avoidance or abatement, (ii) the users of goods and services should pay prices based on the full life cycle of costs of providing goods and services, including the use of natural resources and assets and the ultimate disposal of any waste, (iii) environmental goals, having been established, should be pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, that enable those best placed to maximise benefits or minimise costs to develop their own solutions and responses to environmental problems. 1. When considered in context, the EPA submits that a suspension notice, is not a permanent action, but rather a "tool" to ensure compliance with an EPL and satisfactory environmental management of operations on land. Furthermore, that the power to impose conditions on a suspension notice permits the EPA to consider damage that has occurred to land and how that damage should be managed. In this case, that is a consideration of water pollution that has occurred and the practical measures to be taken to restore and maintain those values. 2. The EPA submits that JET Group's insistence that a suspension is not intended to stop all activity on land (ACS at pars 17-21), and its reliance on the conditions power in s 81(2) to impose conditions to which the Licence was subject immediately before it was suspended is not supported by the plain and ordinary meaning of the word "suspension". Moreover, it is the Licence which is suspended not the activities. In that context, the conditions power is both practical and logical as it may not be appropriate to suspend all conditions including the maintenance of environmental measures to manage stormwater or pollution controls or monitoring controls or the duration of the suspension. 3. However, it is not a license to negotiate some other type of activity under the Licence. 4. It is understood that JET Group has not complied with the Licence because of problems obtaining finance to undertake the works and in circumstances where there is no satisfactory understanding of when JET Group expects to secure tenure or what JET Group would be required to do to achieve that (Ex A; Ex B; Tcpt, 7 June 2024, p 51(31-49)) a long-term suspension on the terms suggested by JET Group is untenable. Consideration 1. Before determining the main issues, as identified, it is necessary to consider the legislative framework in which the decision is to be made. 2. The parties have addressed the relevant framework in their written opening submissions and the difference between them relates to the statutory purpose of the Suspension Notice. A difference in approach that has resulted in two very different versions of the proposed conditions (Ex E and Ex 5). 3. In short, JET Group argues that the non-exhaustive list of reasons in s 79(5) of the POEO Act for the suspension of an EPL expands the power to allow the wishes of the licensee to pause the requirements of an EPL and accommodate its business objectives, to continue an operation on the land not contemplated by the Licence. As identified JET Group raises two arguments in support of its position. First, that conditions imposed on the suspension of the EPL must deal with historic or legacy issues of environmental concern arising from the licensed activity, an objective which it contends the EPA's conditions exceed (AOS at par 5). Secondly, that the status of suspension under the Act is not intended to be immutable because new or varied conditions can be imposed on a suspended licence at any time: s 81(3), and including the power to impose "any conditions to which the licence was subject immediately before it was suspended" under s 81(2). Based on that legislative opportunity, JET Group contends that the suspension of a licence is not intended to operate as a full suspension of all authority to carry out any or all activities previously carried out. Therefore, by expressly authorising suspension on specific conditions it submits that I should accept that there is inference and clear statutory intent that a person is permitted to operate through the suspension period. In that way JET Group submits a trading entity is clearly better able to demonstrate performance obligations of environmental management as endorsed by the Court in Environment Protection Authority v Crush and Haul Pty Ltd; Environment Protection Authority v Cauchi [2022] NSWLEC 113 (per Preston CJ). JET Group also believes that its active pursuit of the modification of its Consent, to allow it to receive waste material at the Premises, is relevant and that the timing of that process under the Environmental Planning and Assessment Act 1979 should be accommodated in the time of the suspension. 4. The EPA for the reasons summarised earlier opposes a lengthy suspension. It argues that the statutory purpose of a suspension notice, when construed in context is a regulatory tool and not a permissive instrument (RCS at pars 8-9) to introduce new activities on the Premises at below threshold levels or otherwise. 5. After careful consideration of the competing views and the relevant provisions of the POEO Act, I prefer the EPA's approach to the construction of the POEO Act, and accept that the suspension power is a regulatory tool, and it is not a permissive tool to allow new activities (including new below threshold activities) on the land whilst the Licence is suspended. While I accept that the reason for the suspension of the Licence may include the reasons in the non-exhaustive list in s 79(5), the purpose of the suspension power is to operate as a "gentler coercive tool" to achieve compliance with an EPL rather than a revocation. That approach is, for the reasons submitted by the EPA, supported after construing the power in context and having regard to the purpose of Ch 3 particularly ss 45, 79 and 81 of the POEO Act and s 6 of the POEA Act. 6. Let me explain my thinking. 7. Section 43 of the POEO Act identifies the types of licences which may be issued and includes the control of non-scheduled activities for the purpose of regulating water pollution resulting from any such activity. The suspension power is in s 79 and subs (3) provides that a suspension may be from a specified period or until fulfilment of specified conditions or until further order of the appropriate regulatory authority. In this case, I accept contrary to JET Group's argument that the Suspension Notice was issued on the basis that it would be in force until the fulfilment of specified conditions but with no specified time limit. 8. The power to impose conditions is in s 81 of the POEO Act (reproduced above at [13]) is broad. When construed in the context of the Act there are limitations. Relevantly, the power is constrained by ss 45, 79 of the POEO Act and s 6 of the POEA Act. Section 45 of the POEO Act imposes mandatory considerations to the exercise of all licencing functions. The provision states: 45 Matters to be taken into consideration in licensing functions In exercising its functions under this Chapter, the appropriate regulatory authority is required to take into consideration such of the following matters as are of relevance— (a) any protection of the environment policies, (b) the objectives of the EPA as referred to in section 6 of the Protection of the Environment Administration Act 1991, (c) the pollution caused or likely to be caused by the carrying out of the activity or work concerned and the likely impact of that pollution on the environment, (d) the practical measures that could be taken— (i) to prevent, control, abate or mitigate that pollution, and (ii) to protect the environment from harm as a result of that pollution, (e) any relevant green offset scheme, green offset works or tradeable emission scheme or other scheme involving economic measures, as referred to in Part 9.3, (f) whether the person concerned is a fit and proper person, Note— See section 83 for provisions relating to the determination of whether a person is a fit and proper person for the purposes of this section. (f1) in relation to an activity or work that causes, is likely to cause or has caused water pollution— (i) the environmental values of water affected by the activity or work, and (ii) the practical measures that could be taken to restore or maintain those environmental values, (g) in connection with a licence application relating to the control of the carrying out of non-scheduled activities for the purpose of regulating water pollution—whether the applicant is the appropriate person to hold the licence having regard to the role of the applicant in connection with the carrying out of those activities, (h) in connection with a licence application—any documents accompanying the application, (i) in connection with a licence application—any relevant environmental impact statement, or other statement of environmental effects, prepared or obtained by the applicant under the Environmental Planning and Assessment Act 1979, (j) in connection with a licence application—any relevant species impact statement prepared or obtained by the applicant under the Biodiversity Conservation Act 2016 or Part 7A of the Fisheries Management Act 1994, (k) in connection with a licence application, any waste strategy in force under the Waste Avoidance and Resource Recovery Act 2001, (l) in connection with a licence application— (i) any public submission in relation to the licence application received by the appropriate regulatory authority under this Act, and (ii) any public submission that has been made under the Environmental Planning and Assessment Act 1979, in connection with the activity to which the licence application relates, and that has been received by the appropriate regulatory authority, (m) if the appropriate regulatory authority is not the EPA—any guidelines issued by the EPA to the authority relating to the exercise of functions under this Chapter. 1. As it presently stands, the Court has no satisfactory evidence of the attempts by Mr Jensen to obtain a long-term lease from the landowner other than his statements to that end. No evidence of the terms offered, or conditions entertained in any such negotiations. In fact, no evidence of any negotiations at all. 2. Instead, Mr Jensen has explained that his efforts for a long lease have been repeatedly rebutted by the landowner. He has also raised concern that the landowner has an intention to allow him to carry out the works under the Consent and then take over the running of the facility herself. That may well be the case – however, to my thinking that only goes to further undermine the likely opportunity for JET Group to secure the long term 10-year lease if I were to allow the 4-year suspension period requested by Mr Jensen. 3. The evidence of the experts is that contamination has occurred, and it is appropriate in that circumstance that contamination issues are not exacerbated. JET Group has ceased the licenced activities whilst the Licence is suspended. The EPA has agreed to allow a limited period for the suspension to enable JET Group to progress any land tenure issue, arrange finances and pursue modification of the Consent which I understand is under way. If the conditions have not been complied with during that period, then the EPA has stated that it will consider exercising its revocation power at that time. To assist JET Group, the EPA has already narrowed the requirements by not requiring compliance with Conditions R4.3, O5.3 and O5.14 (leachate lining and ground water monitoring report) – based on Mr Anthony Dixon's evidence, and the monitoring information that was provided during the joint report. That said, the EPA maintains that the Licensee cannot receive waste at the Premises and has expanded Condition 2 to ensure that it does not cause, permit or allow any waste to be received at the Premises during the suspension period until conditions of the suspension are fulfilled. 4. As the EPA submits, its conditions are both necessary and within power under s 81. There has not been a satisfactory assessment of the cumulative impact of that type of new use on the existing conditions. While the experts are agreed that non-scheduled activities will have a lesser impact than scheduled activities, JET Group has not provided sufficient details of what is proposed and how any impact will be managed or mitigated. At best I have a sketch on a plan indicating where the pasteurisation will be carried out. During the hearing Ms Keserue-Ponte conceded she has been learning about pasteurising and composting as well but conceded it is not her area of specialisation and at best she gave her general understanding of how it would work (Tcpt, 7 June 2024, pp 66(34)-67(26)). In the absence of sufficient detail and further expert assessment, I accept that it would be inappropriate having regard to s 45 of the POEO Act and s 6 of the POEA Act to permit a use when I am unclear on the evidence whether it will cause further impact on the land – assuming power to allow that activity. In any event, as the EPA submits, I do not believe that the Suspension Notice is an appropriate vehicle to condition a new non-scheduled activity on the Licence. 5. I do not accept on the evidence JET Group's invitation "… to draw a distinction between "below threshold activities" and "scheduled activities", and rely on the Court's reasoning in Australian Wildlife Ark at [76]-[77] per Preston CJ – to lift the condition which precludes the receipt of green waste to allow it to carry out the new activity of pasteurisation. 6. That said, I accept that in the decision of Australian Wildlife Ark, the Court emphasised that regulatory and licensing regimes do not, generally, allow for prior unlawful conduct to prevent any grant of statutory authority to carry out conduct in the future. However, in conditioning a suspension notice I am not granting authority to do anything new. As the EPA submits, if JET Group wishes to apply for a variation of its Licence or new licence activity then there is opportunity to make such application under the POEO Act, but not through the conditions of a suspension notice. 7. The EPA submits that the financial assurance Condition 6 was retained by the EPA during the suspension period to provide assurance that if there is damage to the land that JET Group cannot remediate, then the financial assurance may be called upon. This is consistent with the purpose of the financial assurance mandated by Conditions E1.2 and E1.3 for environmental security of the Premises. 8. Section 70 of the POEO Act provides that a condition of suspension may require a licence holder to provide financial assurances. The guidelines tendered in Ex J categorise the proposed new activities as "low risk" but do not consider the peculiar circumstances where there is known contamination on the land and there is a risk of overflow or breach of Dam 4, before a "low risk" activity is undertaken. The guidelines do not state that "low risk activities" do no not require a financial assurance but rather that it is unlikely to be required. However, in the present circumstances where the suspension has been imposed for non-compliance with the conditions of the Licence, I am of the opinion that it is reasonable to require the financial assurances which ought to have been paid, should be paid to cover expenses in the event that the EPA is required to pay for actions under the Licence that JET Group has failed to carry out. Finally, the financial assurances achieve the objects of the POEO Act to "protect, restore and enhance the quality of the environment in New South Wales (s 3(a) and the objects in (d) and s 3(d)(iv)). 9. The monitoring requirements during the suspension period have already been narrowed to scope the pollutants to be sampled and are necessary conditions having regard to the expert evidence. 10. The complaint about the "Background" detail in the Suspension Notice is not an issue. While it is not required by the POEO Act, it should remain in the Suspension Notice because it provides a context – no more and no less. 11. Section 79(5) is not an exhaustive list of relevant considerations. Therefore, I accept that the terms of a development Consent can be a relevant matter in any particular case having regard to s 45. Mr Jensen has told the Court that he has not complied with the conditions of the Consent and he cannot obtain finance without a long-term lease. As such, Condition 5 of the Consent operates such that he can no longer lawfully accept receipt of any waste on the land under that Consent (albeit he told the Court he is pursuing a modification of the terms of that Consent). It was clearly open to the EPA officer to have regard to that matter in formulating the terms of the suspension under the POEO Act. Relevantly, this is not a judicial review proceeding where the conditions can be challenged for illegality or unreasonableness. This is an appeal in Class 1 of the Court's jurisdiction – s 17(a) of the Court Act, where JET Group proposes alternative conditions on the evidence. And, while JET Group contends that the EPA's conditions do not further the objects of the POEO Act - in that they do not address historic or legacy issues of environmental concern arising from the activity which has since been suspended but seek to regulate future non-scheduled activities on the Premises – I have no power to deem such conditions beyond power. My role in this Class 1 appeal under s 287(1) of the POEO Act includes the imposition of conditions on the Suspension Notice as I judge fit on the evidence, standing in the shoes of the EPA under the relevant statutory framework and exercising the power to do so under s 79(3) and s 81. 12. For the above reasons, I prefer the conditions proposed by the EPA that will give the applicant a short 6-month period of time to secure long-term tenancy of the land given its representations that this is the reason for non-compliance with the conditions of the EPL and to that end I give the following direction. Directions 1. The parties are directed to prepare an updated version of the Suspension Notice to reflect my reasons and to submit it to the Court within 14 days and if it is acceptable, I will proceed to make final orders. …………………… S Dixon Senior Commissioner of the Court Annexure A (506001, pdf) Amendments 29 August 2024 - Correction to typographical error at [59]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 29 August 2024