On Friday, 12 May 2017, the Court of Appeal of the Supreme Court of Western Australia delivered its decision in Eclipse Resources Pty Ltd v The Minister for Environment [No.2]  WASCA 90, the appeal by Eclipse Resources Pty Ltd (Eclipse) from the decision of the Supreme Court in March 2016 in which Eclipse was found liable to pay the landfill levy in relation to its various recycling and other operations.
The Court of Appeal dismissed all of Eclipse’s grounds of appeal and upheld the earlier decision.
Amongst other things, the Court of Appeal confirmed the review of the legislative regime that underpins the landfill levy that was undertaken in the previous decision (see paragraphs  to  of the appeal decision).
The Court of Appeal confirmed the broad interpretation of the definition of “waste” contained in the Environmental Protection Act 1986 (WA), which applies under the Waste Avoidance and Resource Recovery Levy Regulations 2008 (WA) and the other legislation relevant to the imposition of the landfill levy. In particular, the Court of Appeal rejected Eclipse’s argument that the nature of the material in question and the purposes for which it is received should be relevant in determining whether the material is “waste”. The focus remains squarely on the nature of the material in the hands of the supplier or source.
The Court of Appeal also upheld the findings in the previous decision as to the meaning of when waste is “disposed of to landfill”, which is the principal criterion for the imposition of the levy.
In the previous decision, there was some reference to the possible unintended consequences or ramifications of a finding that material, derived from the crushing and/or screening of construction & demolition waste and then used by a developer to fill or level a site for development or subdivision, could be subject to the levy. There is no reference to this in the Court of Appeal decision. That is understandable, as the Court of Appeal’s role was to consider the specific grounds of appeal that were raised by Eclipse and, in doing so, to determine or explain what the law is. The ramifications of such a determination are very rarely a relevant consideration, and it is certainly no part of the Court of Appeal’s role to consider what the law should be. However, a number of statements by the Court of Appeal will be a cause of real concern for the development industry, as they seem to provide little or no room to avoid the chain of reasoning as follows:
- construction and demolition materials are “waste” in the hands of the original supplier;
- useful materials or products derived from the processing of construction and demolition waste, remain “waste” in the hands of the processer because of the limited scope of the processing that is required to be done to create those materials or products;
- such materials or products also remain “waste” in the hands of any person who simply purchases such materials or products from the processor (see further comment below);
- the use of these materials or products to fill or level a site, even if required for the purposes of development or subdivision, amounts to the materials or products being “disposed of to landfill” in the ordinary meaning of that phrase;
- if more than 500 tonnes of those materials are used in any year, the site reaches the threshold to require licensing as a Category 63 inert landfill under the Environmental Protection Regulations 1987 (WA), and the landfill levy is payable in respect of the material;
- even if the site is not licensed as a landfill, if it is required to be licensed then the levy is still payable under the Waste Avoidance and Resource Recovery Levy Regulations as if the site was licensed.
As to the third point above, some statements by the Court of Appeal might be interpreted as suggesting this may not be case, but it seems very unlikely the Court intended that the simple insertion of an additional link in the chain of supply would avoid the outcome that otherwise seems to clearly flow from the various elements of the decision. If that was what intended, one would have expected this to have been made clear by the Court (particularly as that would be a departure from the findings in the previous decision).
In an article By LSV Borrello Lawyers when the previous decision was published Supreme Court finds that clean fill amounts to waste and its use attracts the landfill levy, it was suggested that the possibility of the scenario described above raised a serious need to consider amendments to clarify the intended application of the landfill levy. Since then, the absence of any such clarification from the Department of Environment Regulation or the State Government has caused great uncertainty in the recycling industry. It may well be that the regulators were awaiting the Court of Appeal’s decision, but that decision has simply affirmed the need for clarification, which could be achieved as simply as a refined definition of “waste” for the purposes of the levy, to exclude waste-derived materials or products that meet applicable standards or criteria, or that are approved by the regulators. It is hoped that the regulators will promptly clarify the application of the landfill levy so as to alleviate its impacts on the development industry.
For further information about this case please contact Julius Skinner firstname.lastname@example.org. Julius Skinner.