Slade v Kempsey Shire Council

1. [1]

   McCOLL JA: I agree with Macfarlan JA.

2. [2]

   MACFARLAN JA: In 2011 Mr Michael Slade, the first appellant, became the lessee of part of a Crown reserve at Kempsey managed by Kempsey Shire Council, the respondent. Mr Slade conducted a recycling business on the site, with the assistance of his father, Mr Barry Slade, the second appellant. On 21 June 2011 the business was incorporated and the company, Mid Coast Skip Bins & Metal Recycling Pty Ltd, took over the lease. The company vacated the site on 30 April 2012 and the lease was terminated by the respondent on 16 May 2012.

3. [3]

   On 10 August 2012 the Environment Protection Authority (“EPA”) issued a Clean-Up Notice to the company under s 91 of the Protection of the Environment Operations Act 1997 (NSW) (the “PEO Act”). As well, the respondent issued Clean-Up Notices under s 91 to each of the appellants.

4. [4]

   As satisfactory clean-up did not occur, on 17 January 2013 the EPA issued a notice to the respondent under s 92(1) of the PEO Act requiring it to clean up the site. A variation of 17 April 2013 extended the time for compliance with the notice.

5. [5]

   After it undertook substantial clean-up work at the site, on 7 November 2013 the respondent served notices on each of the appellants under s 104(2) of the PEO Act requiring them to pay to the respondent the respondent’s reasonable clean-up costs and expenses of $1,291,728.26.

6. [6]

   When the appellants failed to pay this amount, the respondent commenced Class 4 proceedings against them in the Land and Environment Court seeking to recover it as a statutory debt under s 105(1) of the PEO Act.

7. [7]

   In accordance with an order of the Court, and as agreed by the parties, a hearing on all issues other than the quantum of the alleged debt took place before Biscoe J. By judgment of 21 August 2015 his Honour determined the issue of liability in favour of the respondent and entered judgment for it against the appellants in an amount to be assessed by the Court, or as agreed by the parties ([2015] NSWLEC 135). The outstanding issue of quantum was dealt with at a hearing before Sheahan J in June 2016. By his judgment of 27 February 2017, his Honour quantified the amount for which the respondent was entitled to judgment against the appellants as $1,286,452.62 ([2017] NSWLEC 10). The appellants were represented by counsel before Biscoe J but appeared without representation before Sheahan J.

8. [8]

   The appellants’ appealed to this Court pursuant to s 58(1) of the Land and Environment Court Act 1979 (NSW), against both decisions. The respondent initially contended that the appellants required leave to appeal against Biscoe J’s decision but did not press that contention. Although Biscoe J’s decision was interlocutory and the appellants would have needed leave to appeal against it prior to final judgment in the proceedings (Supreme Court Act 1970 (NSW), s 101(2)(e)), challenges to interlocutory judgments may be made, without leave, in the course of an appeal from a final judgment (Gerlach v Clifton Bricks Pty Ltd (2002) 209 CLR 478; [2002] HCA 22). Accordingly, the appellants may challenge Biscoe J’s decision in the course of their appeal against the final judgment of Sheahan J, without the need to obtain leave to appeal.

9. [9]

   On the appeal, the appellants, who were unrepresented, contend that, for the respondent to be entitled to recover its clean-up costs and expenses from the appellants, it was necessary for the respondent to have effected that clean-up pursuant to the Clean-Up Notice that the EPA issued to the respondent. The appellants contend that this did not occur because the EPA’s requirement in its notice for the respondent to provide an Asbestos Assessment Report was not complied with. They submit that the report provided, that of Mr William Ellis, was not one, as required by the notice, “prepared by a qualified and experienced Occupational Asbestos Hygienist”.

10. [10]

    For the reasons given below, I consider that these contentions should be rejected and that the appeal should be dismissed with costs.

Protection of the Environment Operations Act 1997

1. [11]

   Section 6 of the Act, relevantly for this case, defines the EPA as the “appropriate regulatory authority” for the purposes of the Act.

2. [12]

   Relevant sections of the Act are as follows:

3. [13]

   The respondent is a “public authority” for the purposes of ss 92, 104 and 105.

The relevant notices

1. [14]

   The relevant part of the EPA’s Clean-Up Notice to the respondent dated 17 January 2013 is as follows:

2. [15]

   The recitals to the respondent’s notice dated 7 November 2013 to Mr Michael Slade requiring payment of the respondent’s reasonable costs and expenses included the following:

3. [16]

   The recitals to the notice to Mr Barry Slade were in relevantly identical terms.

Mr William Ellis’ report

1. [17]

   Mr William Ellis, an environmental engineer, prepared for the respondent a report dated April 2013 entitled “Expert Report Relating to Asbestos Contamination and Waste Classification”. The report concerned the subject property. It stated that it might be “used in litigation between KSC and the former leaseholder to the Site Mid Coast Skip Bins & Metal Recycling Pty Ltd” and that it was prepared in conformity with the Expert Witness Code of Conduct set out in Schedule 7 to the Uniform Civil Procedure Rules. The report identified the results of detailed investigations of material on the site, including suspected asbestos.

2. [18]

   In his curriculum vitae attached to the report, Mr Ellis described his education as follows:

3. [19]

   Articles of which Mr Ellis was stated in the report to be a co-author included articles with the following titles:

The judgments at first instance

1. [20]

   In his 55 page judgment of 21 August 2015 Biscoe J considered the meaning of the expression “reasonably suspects” which is used in ss 92 and 104 of the POEO Act and also considered the concept of causation of a pollution incident referred to in those sections. Having made findings of relevant facts, his Honour concluded that the appellants were liable to pay to the respondent the amount of its clean-up costs.

2. [21]

   In his judgment of 27 February 2017 Sheahan J quantified the amount to which the respondent was entitled as the amount to which I have earlier referred. His Honour said the following in relation to the point that the appellants did not raise before Biscoe J but seek to raise in this Court:

Grounds of Appeal

1. [22]

   The grounds of the appellants’ appeal are as follows:

DETERMINATION OF THE APPEAL

1. [23]

   As noted earlier, the appellants argued on appeal that the respondent was not entitled under s 105(1) to recover its clean-up costs because it did not incur those costs in the course of its compliance with the notice issued to it by the EPA on 17 January 2013 (see [14] above). The appellants contended that this was so because the EPA’s notice required the respondent to provide to the EPA a report by “a Qualified and Experienced Occupational (Asbestos) Hygienist”. The appellants submitted that Mr Ellis’ report, which was provided by the respondent to the EPA, was not such a report because Mr Ellis did not have relevant qualifications or experience.

2. [24]

   The first answer to these contentions is that, for the following reasons, the respondent’s rights under ss 104 and 105 were not dependent upon compliance with the EPA’s notice to it.

3. [25]

   Section 104(2), which authorises a public authority to issue a notice to the person responsible for pollution to pay clean-up costs, is, by its terms, conditioned upon the public authority having taken “clean-up action under s 92”.

4. [26]

   Section 92 has two limbs. First, under s 92(1) the EPA may direct a public authority to take clean up action. The public authority is authorised and required to act on the notice. Secondly, under s 92(2) a public authority may take clean-up action if it reasonably suspects that a pollution incident has occurred or is occurring. As the heading to s 92(2) indicates, action taken in accordance with that subsection is voluntary and not responsive to a notice.

5. [27]

   As a result, even if the appellants’ argument that the respondent did not comply with the EPA’s notice to it is correct, the respondent’s clean-up action was taken of its own volition and thus in accordance with s 92(2). Accordingly, the clean-up action was taken under s 92 and the rights conferred by s 104(2) and s 105(1) were attracted.

6. [28]

   The appellants argued that the respondent should not be permitted to assert that its clean-up work was authorised by s 92(2) because it had elected to rely upon s 92(1). The respondent’s notices to the appellants under s 104(2) asserted that the Council’s clean-up occurred pursuant to the EPA’s notice to it and therefore, by inference, pursuant to s 92(1), rather than s 92(2) (see [14] and [15] above). However, in my view the respondent is not thereby precluded from relying on s 92(2). Its reliance in the notices on s 92(1) did not constitute an election between inconsistent rights or remedies (Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; [2008] HCA 57 at [56]-[58]). Rather, the respondent chose to call in aid one source of power rather than another. An analogy may be drawn with the decision in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; [1931] HCA 21 where in a contractual context the following established principle was confirmed:

7. [29]

   A second reason that the appellants’ argument fails is that even if the requirement in the EPA’s notice to the respondent that a particular type of report be provided was not complied with, that would not have the consequence that the respondent’s clean-up action was not taken pursuant to the notice. On this assumption, the respondent complied with some but not all parts of the notice. There is no reason why its assumed non-compliance with the report requirement in the notice should deprive the clean-up action of that character. In particular, s 104(2) does not stipulate that the public authority must have complied fully with a notice under s 92(1) for s 104(2) to be applicable. It simply requires the clean-up action to have occurred under s 92.

8. [30]

   The third reason that the appellants’ argument fails is that, for the following reasons, it is founded upon a proposition (that Mr Ellis’ report provided to the EPA did not comply with the EPA’s notice) that was not raised at the appropriate time at first instance and should not be permitted to be raised on appeal.

9. [31]

   The respondent’s point concerning Mr Ellis’ report was relevant to the question of liability that Biscoe J dealt with. No objection was taken before Biscoe J to the admission of Mr Ellis’ report, nor any argument put to the effect of that now sought to be raised. As the respondent submitted on appeal, if the point had been raised before Biscoe J, evidence might have been led to deal with it. The respondent referred in this regard, inter alia, to evidence as to what an “Occupational (Asbestos) Hygienist” is and how qualifications and experience as such are obtained. As well, evidence might have been led as to the EPA’s apparent acceptance of Mr Ellis’ report as conforming with the requirement in its notice, with a view to arguing that its conduct amounted to an implicit variation of the terms of the notice. Section 110 of the PEOA permits the variation of notices and, whilst it provides that that may be done by “a subsequent notice or notices”, it does not in my view limit the methods by which a variation may be effected.

10. [32]

    The point now sought to be raised was raised at the quantum hearing before Sheahan J when Mr Ellis said in evidence that he did not consider himself to be an “Occupational (Asbestos) Hygienist” but the appellants did not seek leave to re-open the liability issue determined by Biscoe J. If they had, the respondent would no doubt have opposed the grant of that leave on the basis that further evidence, and therefore a further hearing, would have been required. That the appellants were not entitled to re-open the issue determined by Biscoe J as of right, but had to seek leave to do so, is indicated by O’Toole v Charles David Pty Ltd (1991) 171 CLR 232; at 245, 260 and 298; [1991] HCA 14 from which it is made clear that a party to proceedings in which an issue is determined separately is, subject to appeal, bound by that determination and, in particular, cannot challenge it at a later stage of the proceedings at first instance.

11. [33]

    Whilst Biscoe J’s decision was interlocutory when made, Sheahan J’s subsequent delivery of the judgment on quantum finalised the proceedings and rendered Biscoe J’s judgment part of the means by which the proceedings were finally determined at first instance. The established principles relating to the raising of new points on appeal accordingly apply to the appellants’ attempt to raise their point referrable to liability that was not raised before Biscoe J. In accordance with authorities such as Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438; [1950] HCA 35, leave to raise a new point should not be given where “evidence could have been given [in the court below] which by any possibility could have prevented the point from succeeding”. For the reasons I have given, that is the case here.

12. [34]

    One remaining matter raised by the appellants to which reference needs to be made is their assertion that, as an expert witness, Mr Ellis breached his duties to the Court by not disclosing his alleged lack of expertise to Biscoe J.

13. [35]

    In my view, there is no evidence that such a breach occurred. Mr Ellis’ qualifications and experience were clearly identified in his report (see [18] and [19] above). They entitled him to give expert evidence before Biscoe J. That he may not have fitted the description in the EPA’s notice of an “Occupational (Asbestos) Hygienist”, an occupation that was unexplained and undefined by the evidence, did not disentitle him to do this, particularly where no objection to him giving evidence was taken before Biscoe J.

14. [36]

    Finally, I add that I do not consider there to be any substance in the appellants’ argument that the respondent should not have relied on Mr Ellis’ report before Biscoe J because that report was allegedly not prepared for the purposes of assisting compliance with the EPA notice. If, as Biscoe J accepted, the report contained relevant expert evidence, the purpose for which it was prepared was irrelevant.

Order

1. [37]

   I propose that the appeal be dismissed with costs.

2. [38]

   BARRETT AJA: For the reasons stated by Macfarlan JA, the appeal should be dismissed with costs. I would only add, in relation to the matter canvassed by his Honour at [26]-[28], that the Council’s action was sustainable by reference to s 92(2) on the footing that the powers or remedies created by the two limbs of s 92 are not inconsistent and that receipt by the Council of the EPA’s notice of 17 January 2013 cannot but have caused it to suspect that a pollution incident had occurred.