The definition of waste confirmed

On 12 May 2017, the Court of Appeal of Western Australia delivered the latest in the line of cases involving Eclipse Resources Pty Ltd (Eclipse) and the Minister for Environment (Minister).¹

This latest case involved three appeals relating to the decision of Beech J. in Eclipse Resources Pty Ltd v The State of Western Australia [No 4],² concerning Eclipse’s liability to pay a waste levy in respect of its operations at certain sites between July 2008 and September 2014.

Relevantly, the primary judge in the Supreme Court concluded that the legislative regime imposing the waste levy did apply to Eclipse’s operations and it’s application was not an excise or tax.

That decision was appealed by Eclipse on four grounds, including:

• Ground 1 - the judge erred in holding that when determining whether “waste is accepted for burial” within the meaning of Category 63 in Schedule 1 of the Environmental Protection Regulations 1987 (WA) (EP Regulations), the purpose for which material is accepted is irrelevant (all unwanted material is potentially waste).
• Ground 2 - the judge erred in holding that the material used by Eclipse to fill the voids on its sites constituted waste disposed of to landfill.
• Ground 3 - the judge erred in holding that the Department of Environmental Regulation (DER) estimates in relation to the level of waste were valid on the basis that the estimates did not discriminate amongst the types of material used by Eclipse to fill the voids.
• Ground 4 - the judge erred in not finding that the tax imposed on Eclipse in respect of the materials received, was excise and invalid for being contrary to section 90 of the Commonwealth Constitution (Constitution)

The purpose of this note is not to review the findings of the Court in relation to each of those grounds, save as to comment on the Court’s findings with respect to the interpretation of the nature of fill and potential impacts on the land development industry (and in particular previously identified unintended consequences).

Those considerations were identified in our earlier update of the Supreme Court’s decision.

Relevant to the definition of waste, the Court of Appeal³ confirmed that “it is sufficient to note that for the purposes of the Environmental Protection Act 1986 (WA) (EP Act), the word ‘waste’ means (in accordance with its ordinary meaning) anything left over or superfluous, as well as any matter, whether useful, i.e. serving some purpose or a practical use, or useless, which is gotten rid of into the environment (subject to any contrary intention appearing)”.

Further, the Court of Appeal indicated that “the word ‘waste’ in the Waste Avoidance and Resource Recovery Act 2007 (WA) (Waste Recovery Act) is given an inclusive definition and there are no words of exclusion, either generally or in relation to a particular material such as sand or soil”.⁴

What that means is that it is now beyond doubt that superfluous material (including fill removed from a property) accepted for burial is, in circumstances that the premises at which the material is accepted is either a prescribed premises or required to be a prescribed premises under the EP Regulations, potentially required to pay the waste landfill levy.

A key consideration of the Court of Appeal in relation to the circumstances of the site was the fact that Eclipse had accepted “waste” for the purposes of burial to its sites without payment (i.e. the material was given away). The Court was not convinced by the contention made by Eclipse that it had no obligation to pay a levy because of the general nature of its enterprise being consistent with the objectives of the Waste Recovery Act and contributing to a broader public or private good by assisting with the rehabilitation of land in which voids exist, particularly as part of its sequential land use operations.⁵

The Court of Appeal stated quite plainly that the legislature intended that a levy would, through a charge back to the supplier, ultimately be borne by the source of the waste material and that the levy would thereby create a financial incentive to reduce or eliminate the volume or extent of waste created at its source.⁶ What that means is that if Eclipse had paid for the waste material brought to the site it would have had a greater incentive not to use that part of the waste that could be beneficially used elsewhere to fill the voids. In that way Eclipse would only accept for burial superfluous material and only be paying the levy on that material that could not be used or onsold.

As an aside, the practical consequence of that is that construction and demolition contractors utilising a landfill facility for the purposes of crushing, screening and recycling and subsequent filling of a void with superfluous, will still be liable for the material used to fill the void under the Waste Recovery Act.

If clean fill derived from other sites upon which it is superfluous is used to fill those voids the waste levy clearly attaches to it. The only appropriate way for former quarries to be filled in a commercial way, is by way of a careful and coordinated receival of waste (at a cost to the source), the recycling of that waste to produce beneficial material (for sale by the receiver) and only the filling the void with material that is well and truly superfluous.

It is interesting to note in the course of the decision that no mention is made of the unintended consequences identified in the previous matter and in particular, the impacts on the development industry, where levels of fill can sometimes be in volumes that may trigger the prescribed premises threshold in the EP Regulations. That said, the Court of Appeal does note that application of the levy will depend upon the purpose and the nature of the material and the circumstances in which the material is obtained or procured by another person.⁷ In circumstances where it is clearly not the case that the materials are to be utilised for the purposes of “landfill” and simply used for the purposes of subdivisional works, payment of the levy should not be incurred. That is however not clear on a reading of the EP Regulations. The question still remains however whether or not the DER will put the matter beyond doubt in amending the EP Regulations to put that matter beyond doubt.

The remaining grounds, albeit interesting, are not relevant to the broader development industry save to note that each of the grounds were dismissed by the Court of Appeal, effectively removes criticism of the manner in which the levy is calculated (by way of estimates), or whether or not the levy is an excise for the purposes of the Constitution.

Whilst this case may bring an end to the matter for Eclipse, for a short while at least, there does remain a residual question in relation to the requirement for the amendment of the EP Regulations to put the unintended consequence for the development industry beyond doubt.

If you have any queries in relation to any aspect of this decision, or the impact of the waste levy on your business, please contact any member of the Lavan’s Planning and Environment Team.