JET Group Australia Pty Ltd v Environment Protection Authority [2018] NSWLEC 49 (12 April 2018)

Last Updated: 12 April 2018

Land and Environment Court New South Wales

Case Name:	JET Group Australia Pty Ltd v Environment Protection Authority
Medium Neutral Citation:	[2018] NSWLEC 49
Hearing Date(s):	10 April 2018
Date of Orders:	12 April 2018
Decision Date:	12 April 2018
Jurisdiction:	Class 1
Before:	Moore J
Decision:	(1) The appeal is upheld; (2) The decision and orders made by the Commissioners on 19 October 2017 are set aside; (3) The proceedings are remitted to be determined by a Commissioner in accordance with this decision; (4) The Respondent is to pay the Appellant’s costs of the appeal as agreed or assessed; and (5) The exhibits are returned.
Catchwords:	APPEAL - appeal pursuant to s 56A of Land and Environment Court Act 1979 - appeal confined to questions of law - appeal against conditions imposed by Commissioners on an Environment Protection Licence APPEAL - first ground of appeal that Commissioners failed to give reasons for imposing contested element of an operational condition - issue clearly in contest - issue subject to partial agreement by relevant experts - although this contested issue was not subject of submissions by counsel for the Appellant before the Commissioners, it was expressly addressed by counsel for the Respondent who clearly set out the nature of the competing positions - issue not merely subsidiary or incidental or subsumed by matter in contest addressed by the Commissioners - condition sought by the Respondent incorporated in conditions imposed by order (2) made by the Commissioners - no explanation given by the Commissioners for adopting the position advanced by the Respondent in preference to that sought by the Appellant - absence of reasons on contested issue vitiated the Commissioners’ decision to impose the condition - matter remitted for determination of contested condition APPEAL - second ground of appeal that Commissioners relied on the provisions of the wrong statute in imposing a condition requiring the Appellant to provide financial assurance in a specified amount to the Respondent - ground conceded by the Respondent - concession properly made - matter remitted for determination of financial assurance issue pursuant to correct statutory provisions COSTS - costs follow the event in s 56A appeals - Respondent to pay Appellant’s costs as agreed or assessed
Legislation Cited:	Civil Procedure Act 2005, s 98 Environmental Planning and Assessment Act 1979 Land and Environment Court Act 1979, s 56A Protection of the Environment Operations Act 1997, ss 53 and 287, Sch 1 Uniform Civil Procedure Rules 2005, Pt 42 r 42.1 and Sch 1
Cases Cited:	Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367 Jet Group Australia Pty Ltd v Environment Protection Authority [2017] NSWLEC 1588 Segal & Anor v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Wiki v Atlantis Relocations (NSW) Pty Limited (2004) 60 NSWLR 127; [2004] NSWCA 174
Category:	Principal judgment
Parties:	JET Group Australia Pty Ltd (Appellant) Environment Protection Authority (Respondent)
Representation:	Counsel: Mr P Clay SC/Ms N Hammond, barrister (Appellant) Mr C Norton, barrister (Respondent) Solicitors: Hicksons Lawyers (Appellant) Environment Protection Authority (Respondent)
File Number(s):	345340 of 2017
Publication Restriction:	No

TABLE OF CONTENTS

Introduction

The appeal against the Commissioners’ decision

Introduction

The appeal grounds

Financial assurance requirements issue

Introduction

The Commissioners’ decision

Consideration

Conclusion on the financial assurance requirements issue

The gas relief layer issue

Introduction

The Commissioners’ summary of the evidence

Extracts from the judgment

The Joint Expert Report on the gas relief layer issue

Mr Dixon’s oral evidence on the gas relief layer issue

Mr Astill’s closing submissions for the Company

Mr Norton’s closing submissions on the gas relief layer issue

Mr Astill’s closing submissions in reply

The Commissioners’ findings on the leachate dam matters

Consideration

Costs

Orders

JUDGMENT

Introduction

1. On 7 and 8 August 2017, Brown C and Bish C heard an appeal by JET Group Australia Pty Ltd (the Company) against the deemed refusal by the Environment Protection Authority (the EPA) of an application for an Environment Protection Licence (EPL). The appeal was brought pursuant to s 287 the Protection of the Environment Operations Act 1997 (the POEO Act) because of the EPA’s deemed refusal of the EPL.
2. The EPL had been sought to permit the Company to operate a composting, resource recycling and waste storage facility at 76 Nomad Road, Toronto (the site). The site has a formal title descriptor of Lot 91 in Deposited Plan 755207.
3. The application for an EPL had been made under s 53 of the POEO Act because composting and resource recovery are both activities declared to be scheduled activities by Sch 1 of the POEO Act.
4. On 19 October 2017, the Commissioners delivered their decision (Jet Group Australia Pty Ltd v Environment Protection Authority [2017] NSWLEC 1588). The matters requiring determination by the Commissioners were limited because, as their decision discloses at [4], only two issues remained in dispute between the Company and the EPA. The Commissioners wrote:

4 The parties agree that an EPL can be issued for the proposed operation on the site, however the parties disagree on the conditions to be attached to the EPL. The areas of dispute still remaining after the submission of further information from the Applicant are:
• the specification for the leachate liner for the operations area and leachate dam, and
• the appropriate financial assurance as security against environmental harm.

5. The Commissioners’ decision notes that an EPL was sought to permit the Company to carry out scheduled activities in the course of operating a resource recovery facility. The specific approval sought was noted by the Commissioners, at [2], as being for:

Composting - 20,000 tonnes per annum green waste and 8000 tonnes per annum of additives - soil, sand, fly ash etc to produce mulch and compost as per resource recovery exemptions and 593 orders to raw mulch, pasteurised mulch and compost including AS44SA Category organics only.

The appeal against the Commissioners’ decision

Introduction

6. The Company has appealed against the Commissioners’ decision. The appeal was filed on 15 November 2017. The appeal has been made pursuant to s 56A of the Land and Environment Court Act 1979 (the Court Act), a provision which reads, relevantly:

(1) A party to proceedings in Class 1, 2, 3 or 8 of the Court’s jurisdiction may appeal to the Court against an order or a decision of the Court on a question of law, being an order or a decision made by a Commissioner or Commissioners.
(2) On the hearing of an appeal under subsection (1), the Court shall:
remit the matter to the Commissioner or Commissioners for determination by the Commissioner or Commissioners in accordance with the decision of the Court, or
...
(3) ...

7. The approach to be taken in this appeal involves not only my consideration of the reasons given by the Commissioners for reaching their decisions on the contested conditions, but also the evidence, both documentary and oral, that was before them, together with the submissions which were made for the Company and those made on behalf the EPA, both before me and below. I have had the benefit of a transcript of the proceedings before the Commissioners.
8. It is also appropriate to note that, in my consideration of the reasons given by the Commissioners for their decision on the two contested matters, it is not appropriate for me to seek to dissect their decision by analysing it with a finetoothed comb (Brimbella Pty Ltd v Mosman Municipal Council (1985) 79 LGERA 367).

The appeal grounds

9. The appeal grounds arose from the imposition of conditions on the EPL by the Commissioners. The first of the appeal grounds (particulars omitted) was pleaded in the following terms:

4 In relation to the need for a ’gas relief layer’ imposed by the Court in Condition O6.2C of the environment protection licence:
(a) The Court erred in law by failing to make a finding or explain its finding in its judgment that Condition O6.2C should include a requirement that “a gas relief layer must be included beneath the HDPE membrane ...”
(b) The Court erred in law by imposing at Condition O6.2C a requirement that “a gas relief layer must be included beneath the HDPE membrane ...” without evidence to support the need for such.
(c) The Court erred in law by imposing at Condition O6.2C a requirement that “a gas relief layer must be included beneath the HDPE membrane ...” when the evidence was all to the effect that a gas relief layer was not required.

10. The second of the appeal grounds (particulars omitted) was pleaded in the following terms:

5 In relation to the financial assurance imposed by the Court in Condition E1 of the environment protection licence:
(a) The Court erred in law by applying “section 86(6) to (10)” of an unidentified Act as a basis for, or in its determination of, its decision to impose a financial assurance in Condition E1.
(b) The Court erred in law by applying the text of Section 80A(6)-(10) of the Environmental Planning and Assessment Act 1979 (“EPA Act”) as a basis for, or in its determination of, its decision to impose a financial assurance in Condition E1.
(c) The Court erred in law by failing to apply Part 9.4 of the Protection of the Environment Operations Act 1997 to its determination of the issue of financial assurance.

Financial assurance requirements issue

Introduction

11. Given the EPA’s concession discussed below, it is convenient to deal with the financial assurance ground of appeal first.
12. The ability to require provision of a financial assurance sum to guard against costs arising from an adverse incident in the course of carrying out activities regulated by an EPL is conferred by s 70 of the POEO Act. This provision enables the imposition of a condition in an EPL specifying the amount of financial assurance to be required and, if appropriate, arrangement for scheduling the provision of the financial assurance over a period of time. The provision is in the following terms:

70 Conditions for financial assurances
The conditions of a licence, including the conditions of the suspension, revocation or surrender of a licence, may require the holder or former holder of the licence to provide financial assurances, as provided by Part 9.4.

13. Part 9.4 of the POEO Act provides the framework for requiring a holder of an EPL to provide financial assurance(s) to the EPA as a requirement of the granting of the EPL. The purpose for which such financial assurance(s) are able to be required is set out, at the commencement of Pt 9.4 of the POEO Act, in s 296. The provision is, relevantly, in the following terms:

296 Purpose of this Part
(1) The purpose of this Part is to provide (by way of conditions of environment protection licences) financial assurances to secure or guarantee funding for or towards the carrying out of works or programs (such as remediation work or pollution reduction programs) required by or under a licence.
(2) ....

14. A right of appeal to this Court against, inter alia, such a condition lies as of right as a consequence of the terms of s 287 of the POEO Act. It is not necessary to quote the terms of this provision.

The Commissioners’ decision

15. The Commissioners dealt with the question of provision of; amount to be required for; and the scheduling of payments to give effect to a financial assurance requirement in the decision between [44] and [53]. It is unnecessary to set out the entirety of this portion of the decision. In [53], the Commissioners determined that the financial assurance proposed by the EPA (of $200,000) should be imposed.
16. It is, however, appropriate to record that, in [45], they referred, by necessary implication, to “Section 86(6) to (10)” as the source of their power to require the $200,000 financial assurance they adopted.

Consideration

17. It is clear that whatever was intended to be the reference by using the term noted in [16] above, it was not a reference to the power given, initially to the EPA, and on appeal to the Commissioners, to impose a condition which they determined was appropriate. Such a power is only conferred by s 70 of the POEO Act.
18. It is likely that the reference is to a provision in the Environmental Planning and Assessment Act 1979 (the EP&A Act) - as the provisions of the EP&A Act were numbered as at the date of the hearing and, subsequently, the determination (noting that, from 1 March 2018, the EP&A Act has now been reorganised and the numbering of the reorganised provisions has adopted a Dewey decimal system in replacement of the earlier applicable reference numbering approach).
19. The EPA has conceded, quite properly, that this error of purporting to rely on an inapplicable statutory provision in lieu of the correct available statutory provision infects the Commissioners’ decision on this issue so as to vitiate their purported exercise of power imposing a financial assurance as a condition of the EPL.

Conclusion on the financial assurance requirements issue

20. Although, in the summons commencing this appeal before me, the Company pressed that the financial assurance provisions of the EPL be struck out so as to remove any financial obligation falling on the Company, Mr Clay SC, counsel for the Company on this appeal (but not below), properly resiled from this position and embraced the concession made by Mr Norton, counsel for the EPA, that this issue should be remitted for further consideration by one or more Commissioners.
21. Neither Mr Clay nor Mr Norton sought an exclusionary remitter. However, in light of the listings pressure for Commissioners within the Court’s diary and the fact that the presiding Commissioner below is to retire at the end of June 2018 (before the matter is likely to be able to be relisted for a further hearing), it is appropriate that any remitter be in general terms, so that the Chief Judge may make an appropriate allocation for a further hearing.

The gas relief layer issue

Introduction

22. I have earlier set out what the Commissioners considered were the two matters which were in contest before them. The position with respect to the financial assurance requirements (as to whether and for how much such assurance might be required) was clearly identified by them.
23. However, the matters relating to the design of the leachate dam were more complex. In fact, there were two separate matters about which the parties were in dispute. The first of them concerned a technical design specification for the membrane, whilst the second was the question of whether or not there should be imposed what was technically described as a “gas relief layer” as part of the design of the membrane to line the leachate dam.
24. The purpose of a gas relief layer, the evidence discloses, is to act as insurance against gaseous bulges (known as “whales” or “hippos”) forming in a fashion which had the effect of reducing (potentially significantly) the design holding capacity of the leachate dam. A requirement for such a gas relief layer had been proposed by the EPA in its draft “without prejudice” conditions as the final element of condition O6.2. The sentence proposed by the EPA in this condition was in the following terms:

In addition, a gas relief layer must be included beneath the HDPE membrane which also has the capacity to be extract any leachate entering it.

25. The position put by the Company in its response to the proposed conditions was that this sentence should be omitted. It was struck through in the marked-up copy of the conditions proposed by the Company.
26. In the final version of the competing conditions put to the Commissioners (Exhibit D before me, commencing at folio 137) offered the Commissioners three options from which to choose. Those options were in the following terms:

Condition O6.2c contended for by the EPA:
O6.2c The Leachate Storage System is to be lined with a HDPE membrane with a minimum thickness of 1.5 mm and is to be underlain by 600m of compacted clay with permeability of no more than 10-9 m/sec. The HDPE membrane must meet or exceed the requirements for manufacture and performance contained in relevant specifications in GRI Test Method GM 13 for HDPE geomembranes. The membrane must have material properties that ensure it can maintain its performance for a period of at least equivalent to the desired working life of the leachate containment system. In addition, a gas relief layer must be included beneath the HDPE membrane which also has the capacity to extract any leachate entering it.
ALTERNATIVE VERSION OF CONDITION 6.2c:
Should the Court determine that a gas relief layer is not to be required in Condition O6.2c, the EPA contends for the condition in the form below, plus a further condition (Condition O10.4a) as follows:
O6.2c The Leachate Storage System is to be lined with a HDPE membrane with a minimum thickness of 1.5 mm and is to be underlain by 600m of compacted clay with permeability of less than 10-9 m/sec. The HDPE membrane must meet or exceed the requirements for manufacture and performance contained in relevant specifications in GRI Test Method GM 13 for HDPE geomembranes. The membrane must have material properties that ensure it can maintain its performance for a period of at least equivalent to the desired working life of the leachate containment system.
Condition O10.4a The Operational Management Plan is to include operating procedures to ensure that the capacity in the Leachate Storage System is no less than 8.3 Megalitres at all times.
• O6.2c and O10.4 contended for by the Applicant:
O6.2c The Leachate Storage System is to be lined with a HDPE membrane with a minimum thickness of 1.5mm. The HDPE membrane must meet or exceed the requirements for manufacture and performance contained in relevant specifications in GRI Test Method GM 13 for HDPE geomembranes. The membrane must have material properties that ensure it can maintain its performance for a period of at least equivalent to the desired working life of the leachate containment system.
O10.4a The Operational Management Plan is to include operating procedures with appropriate contingency measures to be implemented in order to manage environmental risks in the event of a loss of capacity in the leachate Storage System.

27. The first of the options set out above was the preferred position of the EPA. The second of the options was the EPA's fall-back position. The final option was that advanced by the Company as its preferred outcome.

The Commissioners’ summary of the evidence

28. In their summarising of the evidence, the Commissioners turned, first, to summarising the evidence of Mr Bozinovski, the relevant expert on behalf of the Company. The portion of the summary concerning the leachate dam membrane was set out in [20] to [25] of their decision. It was in the following terms:

20 Mr Bozinovski agreed with Mr Dixon that there is potential for gas build-up beneath the leachate liner, that could have the effect of causing the liner to bubble (referred to as a ‘hippo’ or ‘whale’ effect) and thereby resulting in reduced storage volume within Dam 3; potentially increasing the need for overflow. He also agreed that a gas relief layer could be used to reduce this effect, although he proposed that there are ‘other methods’ that could be as effective and less costly although no specific methods were stipulated. Mr Bozinovski suggested that the possibility of other methods would depend on the size of the ‘hippo’ and could be detailed further in the Construction Environmental Management Plan (CEMP).
21 Mr Bozinovski stated that only the NSW Composting Guidelines are applicable for consideration at this site. Any suggestion that the Victorian Composting Guidelines are relevant, even though newer, do not relate to the situation in NSW and should be rejected.
22 Mr Bozinovksi indicated that the Applicant would need a further 18 months from the date of the EPL, to better understand the hydrological and hydrogeological conditions, and that would better inform the understanding of potential water pollution risk, design of the leachate control system and support remediation of any observed impact. He suggested that further groundwater and surface water monitoring could be used ‘to catch the leak before it went too far’, and that this should form a component of contingency planning to mitigate impact. He is also of the view that there is sufficient hydrogeological and water quality data, at and around the site, to provide a basis to support the minimum design requirement in the NSW Composting Guidelines, of 600 mm compacted clay layer with permeability of 1 x 10-7 m/s, for both the operational area and leachate Dam 3. A 100 mm cover layer of material was suggested over the liner for protection of its integrity.
23 Mr Bozinovksi stated that as they are only seeking an EPL at this stage and that the CEMP could be developed after a period of 18 months to allow more detailed site specific data collection that would inform the required design of the leachate control system.
24 Mr Bozinovski provided a cost estimate (Exhibit A) to install a range of different leachate control systems at the site, including those proposed by the Applicant and the EPA. He agreed that the lower permeability leachate liner as proposed by the EPA would result in a higher cost. The cost estimate for the applicants design (1 x 10-7 m/s liner) is $214,515 and the EPA’s suggested design (1 x10-9 m/s liner) is $1,287,090. Further to this, Mr Bozinovski suggests that costs could be reduced by using existing clay soils onsite or where appropriate (such as in the operational area), the sandstone basement rock could be utilised as a natural barrier below the leakage liner. This could then be supported by an appropriate groundwater monitoring system to facilitate mitigation of any offsite water pollution impacts.
25 Mr Bozinovski believes that there is sufficient understanding of the hydrogeological conditions beneath and around the site to ‘make an opinion’ on the applicability of the minimum requirements for a leachate control system at the site, for the operations area and Dam 3.

29. The Commissioners then turn to summarising the expert evidence given by Mr Dixon on behalf of the EPA on this point. Their summary of Mr Dixon's evidence was set out in the judgment at [26] to [31]. It was in the following terms:

26 Mr Dixon position is that there is insufficient hydrogeologic information for the site to provide an understanding of baseline conditions. He agreed with Mr Bozinovski that the regional aquifer held a lower risk, however he disagreed that the current land uses had lowered the ‘groundwater sensitivity’ of the area. He was unable to define the beneficial use for this groundwater around the site.
27 Mr Dixon was also not of the same opinion as Mr Bozinovski that the sandstone geology could feasibly be used as an effective barrier to leachate infiltration into the regional aquifer. Mr Dixon notes that a study undertaken for a nearby waste disposal facility at Awaba for the Centennial Coal Environmental Impact Assessment in 2010, determined the permeability of the sandstone geology in the order 5.8 x 10-7 m/s. He also notes that the Awaba site is licensed for composting and waste disposal (Exhibit B), and has a ‘double liner’ beneath the leachate dam, although the operational area is not lined; this may contribute to pollution through leachate infiltration.
28 To mitigate the potential environmental risk to receiving waters, Mr Dixon applies the ‘precautionary principle’ in the design of the leachate control system at the site. He states that as information on the hydrologic/hydrogeologic characteristics of the site is very limited based on two water samples between the period 2011 and 2016, and the presence of existing water pollution potentially sourced from the site under ‘existing’ conditions, then a lower leachate liner permeability is required, in the order of 1 x 10-9 m/s. Mr Dixon states that ‘prescriptive liner’ conditions, as provided in the Victorian Composting Guidelines, are required to mitigate the potential, and as yet poorly defined, risk of water pollution. He noted that whilst older more established composting sites had not generally adopted the more stringent leachate liner control standards, newer composting development sites have often adopted a concrete pad across the operational area to minimise leachate infiltration. Mr Dixon considers that a minimum of 1 year’s monitoring of both groundwater (quarterly intervals) and surface water (monthly intervals) would be required to properly assess the hydrological/hydrogeological characteristics of the site, and the potential risk of water pollution. Mr Dixon is of the opinion that without such a period of data, the lower leachate liner permeability is required to mitigate the risk.
29 To support his position, Mr Dixon utilises a model, United States Hydrological Evaluation of Landfill Performance, to facilitate his understanding of the potential leakage volumes under different scenarios using the input data provided from the DG report and subsequent discussions with Mr Bozinovski. The model results (Exhibit 3) suggest it is most sensitive to permeability, and that under the minimum requirement for a leachate liner (permeability of 1 x 10-7 m/s), the estimated leachate leakage would be approximately 2.5 Megalitres/annum (ML/a), and with a liner permeability of 1 x 10-9 would be 1.8 ML/a, which is similar to a geosynthetic clay liner (GCL) with 1.8 ML/a estimated leakage. He further states that these estimates were likely to be conservative as the volume of infiltration across the operational area from the irrigation of leachate was not considered in this model.
30 Mr Dixon accepts that the NSW Composting Guidelines are appropriate for use in NSW; the Victorian Composting Guidelines provide a more up to date and ‘better industry standards’ for management of leachate control. He indicates this was applicable for this site due to the existence of water pollution and need to apply the precautionary principle due to lack of understanding of the water dynamics. He states that the operational area and leachate control for Dam 3 be underlain by either, a 600 mm thick compacted clay layer with permeability of 1 x 10-9 or a GCL. A 100 mm cover layer of material is suggested over the compacted clay layer for protection of its integrity.
31 Mr Dixon considers that a delay of 18 months before a CEMP could be developed (with the design of a leachate control system based on groundwater and surface monitoring data gathered during this time) is unacceptable. It also noted that as Mr Bozinovski explained, a further 18 month delay in the completion of a leachate control system would be necessary to allow tendering and construction design/installation. Mr Dixon notes that that the Applicant was required, as part of its previous general terms and conditions in 2011, to undertake water monitoring, and this was not undertaken.

30. Although the matter of “hippos” or “whales” is mentioned in [20] when summarising Mr Bozinovski’s evidence, the topic is not returned to and the remainder of the evidentiary summaries is confined to matters relating to the required permeability standard to be imposed on the proposed membrane.

Extracts from the judgment

31. The Commissioners dealt with the question of the permeability standard for the liner for the leachate dam in their findings between [33] and [43]. The relevant portions of the Commissioners’ findings are set out below (omitting [35] to [38] as not presently relevant):

33 The experts agree that the site is already subject to existing water pollution due to the historic operation of composting and potentially other activities, and that there is insufficient data to understand the hydrological and hydrogeological regime at the site. The parties also agree that a leachate liner is required beneath the operational area and Dam 3. The experts disagree whether the permeability of any leachate barrier should be 1 x 10-7 m/s (Bozinovski) or 1 x 10-9 m/s (Dixon). While the approach of Mr Bozinovski is consistent with the NSW Composting Guidelines, Mr Dixon maintains that the lack of baseline data for the site requires a more conservative approach.
34 While the experts do not agree on whether there is sufficient data to assess water pollution risk, or hydrological/hydrogeological understanding to inform the adoption of the ‘minimum requirements’ for design of a leachate control system, we agree with Mr Dixon. We also accept the NSW Composting Guidelines are the appropriate standard to consider the question of permeability and that the exceedance of the standards can be justified because of the absence of data to determine the hydrological/hydrogeological characteristics of the site.
...
39 The assessment of the bedrock as having a potentially moderate risk of pollution from this activity suggests that the underlying sandstone has some potential risk. We are satisfied that the Applicant has not produced sufficient evidence to support the consideration of the sandstone geology having sufficient permeability to act a barrier to leachate infiltration beneath a liner of higher permeability, such as 1 x 10-7 m/s.
40 It follows, in our opinion, that the lack of scientific certainty on the extent and consequence of water pollution emanating from site, invokes the precautionary principle and leads the Court to reject the assertion of the Applicant that there is sufficient evidence to assess the water pollution risk as minimal and therefore adopt ‘minimal requirements’ for design of a leachate control system.
41 The precautionary principle is one of the principles of ecologically sustainable development. As stated in Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133, 146 LGERA 10; (2006) 67 NSWLR 256 (at 113).

113 ...There are numerous formulations of the precautionary principle but the most widely employed formulation adopted in Australia is that stated in s 6(2)(a) of the POEO Act. This provides:
“...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 consequence of various options”.

42 We accept that in order to reduce the potential risk of water pollution from the site to receiving waters, the precautionary principle is activated. We accept the evidence of Mr Dixon that the “threats of serious or irreversible environmental damage” are justified and can only be addressed through the imposition of the more rigorous permeability criterion suggested by Mr Dixon given the lack of baseline data on which to make any learned decisions on protecting groundwater from leachate infiltration.
43 For these reasons, we reject the assertion by the Applicant that the ‘minimum requirements’ established in the NSW Composting Guidelines are appropriate for the design of the leachate control system at the site. We acknowledge that the adoption of the more stringent permeability (1 x 10-9 m/s) for the leachate liner beneath both the operational area and Dam 3, is appropriate in the particular circumstances of this case.

32. As can be seen, the Commissioners considered, and reached, a conclusion with respect to the specific issue of the permeability requirement for the leachate liner and, in [43], reached the conclusion that the stricter permeability limit proposed by Mr Dixon on behalf of the EPA ought be imposed.
33. However, it is also clear that there was no discussion in this portion of the judgment that deals with the issue of the gas relief layer and whether or not such a layer should be designed and mandated as an integral element of the membrane for the leachate dam.

The Joint Expert Report on the gas relief layer issue

34. In their joint report, Mr Bozinovski and Mr Dixon record the following relevant to the contest concerning this issue (Exhibit A, folio 127):

CONTENTION 83: Liner for leachate dam
55	To minimise the risk of impact from the escape of leachate from the Leachate Dam, a condition be imposed on any licence granted requiring the Leachate Dam to be designed and constructed to the following standard: a) the leachate Dam must be constructed using an liner system comprising a minimum 1.5mm HDPE liner with a permeability of no more than 10-9 m/second.	... CB and AD agree that a gas relief layer with capacity to collect leachate is not required as a condition of the licence. AD agrees to the removal of the gas relief layer as a mandatory requirement of the licence, provided the licence states that the designer of the dam considers its inclusion and also measures are required in the CEMP and OEMP (and agreed to by the EPA) to reinstate the lost capacity of the leachate storage dam within 1 week of identifying liner uplift in the main leachate dam (ie lost capacity) and within 3 months of identifying a liner uplift in the biofiltration portion (ie lost capacity) of the leachate dam. ...	... AD advises the designer of the HDPE lined leachate dam to include a gas relief layer on the basis it is recommended by the Geosynthetic Institute, but recognises other methods to address liner uplift (like weighting) may be possible. See http://www.geosynthetic-institute.org/papers/paper33.pdf. AD on advice from RT notes that it is more critical for the main leachate dam to maintain its capacity, hence the suggested different timing advice for providing for the lost capacity. CB and AD agree to the exclusion of gas relief layer (if agreed to by the designer) with capacity to collect leachate, subject to conditions for inspection, maintenance and repair of the liner in the event of a whale/hippo (liner uplift). CB stated that installation of a gas relief layer with leachate extraction capabilities was not industry standard based on discussions with over six dam lining suppliers and review of 6 current Environment Protection Licences (EPL’s) for similar composting facilities. In AD’s experience the lining supply companies do not generally design dam liners and it is AD’s experience who has overseen the design of dams (for construction with associated professional indemnity details obligations) that gas relief layers are included in HDPE lined dams. AD asked CB for the details of the lining companies and the EPLs and these were not provided by CB for AD’s consideration. ...

35. As can be seen from the above extract from the joint report of Mr Bozinovski and Mr Dixon, they had reached agreement that such an element of the membrane design did not require to be mandated. Mr Dixon's acceptance of this proposition was qualified to the extent that, as noted above, he agreed to the removal of the gas relief layer as a mandatory requirement of the EPL, provided the EPL required the designer of the dam liner to consider its inclusion and that other measures were required in the CEMP and OEMP (and that these were to be agreed to by the EPA).
36. However, it is clear that the question of mandating the inclusion of a gas relief layer was no longer in dispute between the experts. That which, on the basis of the experts’ evidence, remained for consideration by the Commissioners was whether or not the qualification proposed by Mr Dixon should be mandated.
37. It is, however, also to be observed that the Commissioners were not bound to accept this outcome, but were free to reach some differing conclusion, provided two foundational tests were met for such a conclusion. These tests are:
    • (1) There is a proper evidentiary basis for departing from an agreement reached by the experts; and
    • (2) Reasons are given as to why the Commissioners have concluded that such a departure was warranted.

Mr Dixon’s oral evidence on the gas relief layer issue

38. During the course of the hearing before the Commissioners, and after the conclusion of questioning of Mr Bozinovski and Mr Dixon, Mr Dixon sought to make additional comments. He was permitted to do so. Relevantly, he said (Transcript, 8 August 2017, page 53, lines 14 to 41):

WITNESS DIXON: I'm not sure what happens in the next stage. I'd like to respond to these points. There's some new information that was provided late yesterday about using the rock as the barrier, and that was new to me. I was unaware of that until 5 minutes before 4 yesterday when that was identified. So I'd like to address that. If I could start with the whale and hippo and then the leakage issue. On the whale and hippo issue, it sort of comes down to what's the risk. The risk then is looking at it holistically is in terms of then the dam doesn't have the capacity. When you get a lot of rain, all of a sudden those volumes appear very quickly. If you don't have the capacity available, if a hippo or whale occurs, then the risk of an overflow and a more substantial impact can occur. In discussing with Mr Bozinovski, I conceded that it wasn't necessary to have it as an obligation in the licence, but my suggestion was that it would be considered as a condition to be required to be considered by the designer. In my experience, a lot of designers aren't aware of these nuances because they're not always designing HDPE line dams and that's a little bit of a nuance. I haven't seen it at a compost facility, but I have seen it at at least three landfills where they can the liner lifts up because it's a close density to water. So it doesn't need much pressure underneath it.
When they do lift up, one of the causes can be leakage, slight leakage through and the bacteria then produces a gas that can lift it up, but it can also be groundwater. And we get rainfall; we've got a shallow system here which can then rise up and then drop back down as it discharges, and there's air within the unsaturated zone, and those papers also mention that as another reason why it can occur, not just through leakage; there are other mechanisms. I concede that there are other ways of potentially weighting it down. That might be an option and that's why I considered that point, other than a request like suggesting it be considered by the designer in their designing the facility.

39. In the extract above, it is clear that Mr Dixon is not only restating the more conciliatory position he had adopted in the Joint Expert Report with Mr Bozinovski but was also explaining to the Commissioners why he had agreed that there was no necessity to mandate a gas relief layer provided the designer of the membrane considered whether or not it was appropriate to incorporate such a design feature.

Mr Astill’s closing submissions for the Company

40. During the course of the hearing before me, Mr Norton took me to the closing submissions which had been made, below, by Mr Astill, counsel for the Company. Mr Norton correctly pointed out that, in his primary closing submissions, Mr Astill did not address any of his remarks whatsoever to the issue of the possibility of a gas relief layer being required as part of the membrane to be required to be installed as part of the leachate dam facility.
41. This position is, perhaps, unsurprising given the evidence on the issue contained in the Joint Expert Report elements earlier set out and, more particularly, the position volunteered by Mr Dixon in his evidence at the conclusion of the questioning of the experts on this and related matters. It would not have been unreasonable for Mr Astill to have anticipated that that issue had been “put to bed” in a fashion generally acceptable to his client.

Mr Norton’s closing submissions on the gas relief layer issue

42. In his submissions to me, Mr Norton also took me to portions of his closing submissions to the Commissioners. In those closing submissions, Mr Norton made it clear that, notwithstanding the agreement between the experts (particularly the agreement of his own expert, Mr Dixon, that a gas relief layer was not necessary to be mandated – provided the option of incorporating one was drawn to the attention of, and considered by, the designer of the leachate dam liner), this question remained pressed by the EPA. His submissions on this point were in the following terms (Transcript, 8 August 2017, page 95, lines 11 to 29):

In relation to the issue of swelling of the liner, this is the causing of the bubbles either through infiltration of gases to cause what are colloquially known as whales and hippos which reduce the volume in the dam, it is agreed by the experts that a gas relief liner is not essential, but they also agree that conditions should provide for inspection, maintenance and repair of the liner in the event that swelling occurs. Mr Dixon has recommended that this be addressed in the CEMP and OEMP, and there is the paper which I referred you to behind tab 28 regarding various methods for dealing with swelling. The EPAs position is that the simplest and safest method of dealing with this is simply requiring the installation of a gas relief layer. It does not require the constant monitoring and inspection and maintenance work that is required by other mechanisms. Jet objects to requirement for installation of a gas relief layer. Obviously, the experts say it is not essential, but if the Court were to adopt Jet's position and delete those words, then they should also adopt the position of the experts requiring that this issue be addressed in some way. At the top of p 10, the EPA has an alternative wording condition that should be inserted should the Court reject a gas relief layer as condition 10.4A: that the OEMP include operation procedures to ensure the capacity in the leachate storage system is no less than 8.2 megalitres at all times.

43. As can be seen, Mr Norton, in his own words, expressly drew the attention of the Commissioners to the fact that the EPA, by necessary implication, did not accept the position that appeared to have resulted in an implicit agreement as at the conclusion of the oral evidence of the experts.

Mr Astill’s closing submissions in reply

44. Mr Astill’s submissions in reply made to the quite extensive submissions of Mr Norton were comparatively brief. Perhaps, unfortunately, Mr Astill did not pick up on the fact that Mr Norton had expressly put into play the question of whether or not a condition requiring a gas relief layer remained sought by the EPA - despite what appeared to be the agreed outcome between the experts that this was not required to be mandated. As a consequence, he did not address this issue in his response to Mr Norton's submissions.

The Commissioners’ findings on the leachate dam matters

45. As already set out at [31] above, the Commissioners addressed the question of permeability of the proposed leachate dam membrane at [33] and [34] and then [39] to [43] of their decision.
46. In [42] and [43], they expressly resolved the differences between Mr Bozinovski and Mr Dixon on the question of the permeability standard to be applied to the leachate liner design by adopting the position advanced by Mr Dixon for the more prescriptive position. They did so on the basis of taking a precautionary approach, as discussed in [40] and [41] of their decision.
47. It is to be noted, however, that there is no discussion of whether or not a gas relief layer should be incorporated in the membrane design.

Consideration

48. I have earlier noted the proposition, inherent in the decision in Brimbella, that a decision given by Commissioners of this Court is not to be parsed and analysed as if it had been written by an appellate tribunal. The “fine-toothed comb” approach is to be eschewed.
49. There is, however, an obligation, when determining an issue in contest between the parties, not only to reach a conclusion concerning that issue, but also to give a sufficient explanation of the reasons for reaching that conclusion (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh JA at 278). The reasoning does not need to be lengthy, merely sufficient so that a reader of the decision (particularly concerning expert evidence and where a party which is unsuccessful on the particular point - see Wiki v Atlantis Relocations (NSW) Pty Limited (2004) 60 NSWLR 127; [2004] NSWCA 174 per Ipp JA at [58]) can understand the basis upon which the outcome of the contest was reached.
50. In these proceedings, Mr Norton took me through the evidentiary process which had unfolded before the Commissioners. This evidentiary process disclosed, he submitted, that the overall matter requiring determination was the ensuring of protecting of the efficiency and sufficiency of the operation of the leachate dam (my description, not his). This, he submitted, was the issue between the parties requiring to be determined when expressed at a sufficient level of generality to be regarded as the genus (in the sense discussed by Tobias JA in Segal & Anor v Waverley Council (2005) 64 NSWLR 177; [2005] NSWCA 310 at [99]).
51. That there were two elements to the matters in contention concerning the leachate dam liner - the question of the numerical prescription of the standard to which the liner should be manufactured and the question of whether there should be a gas relief layer incorporated in the design - were, in Mr Norton’s submission, subsidiary matters (to be regarded as “species” for the approach endorsed by Tobias JA) and therefore were able to be regarded as bundled together and dealt with by the Commissioners as a single higher-level issue to be considered and determined as one.
52. Unsurprisingly, the position adopted by Mr Clay was to the contrary. The position advanced on behalf of the Company was that each of the issues concerning the liner to be required for the leachate dam was separate and distinct; required determination in a fashion consistent with the evidence; and with sufficient (even if minimalist) reasons given as to why the Commissioners reached the particular conclusion on each of these two distinct points.
53. Critically, relevant to my consideration, Tobias JA observed in Segal, at [99]:

(a) Although a Commissioner of the Land and Environment Court is obliged to consider the principal contested issues before him or her, each of those issues is the genus of which the various arguments in favour or against the resolution of the issue in a particular way are species.
(b) It is unnecessary for a Commissioner or a judge of the Court to consider each of the species provided he or she has considered the genus. It is that which must be addressed in the Commissioner's or judge's reasons. Those reasons must be adequate to explain, by way of findings and reference to the evidence supporting the findings, the reasoning process adopted by the Commissioner or judge and which has led to his or her conclusion.

54. I therefore need to consider whether the gas relief layer issue was subsumed as part of an indivisible whole (for determination purposes) as part of what might be described as the leachate dam issue (in the singular) or as two separate and distinct contested issues. I am satisfied that the latter position is to be preferred.
55. Although there is a temptation to take the words “the imposition of the more rigorous permeability criterion”, in [42] of the Commissioners’ findings, as a specific and precise declaration of the singularity of the issue being addressed in [39] to [43], such focusing with that degree of precision would, in my view, potentially transgress the cautionary approach mandated by Brimbella.
56. However, as part of the overall language used in these five paragraphs, it is clear that that which was determined by the Commissioners related solely to the first of the two contested aspects of the design of the leachate dam liner.
57. Nowhere in their reasoning do the Commissioners disclose why they preferred the primary position of the EPA on the gas relief layer condition. Some explanation to provide support for this outcome was mandated for the following reasons:
    • (1) The relevant experts (particularly Mr Dixon) had agreed that the incorporation of a gas relief layer in the design of the leachate dam as a protective measure was not a design feature requiring mandatory incorporation, although Mr Dixon proposed that the desirability of such a design element should, expressly, be drawn to the attention of the designer of the dam liner (see the joint report extract at [34] and the transcript extract at [38] above);
    • (2) The Commissioners had been presented with three potential versions of a condition to address issues concerning the leachate dam liner. Whilst each of the versions dealt with the two matters in a bundled-up fashion, nonetheless, there were, on the gas relief layer element, distinct differences between the three options available;
    • (3) Within the three options available to the Commissioners, two of them were advanced for the EPA, with one being a fall-back position offered by the EPA in the event that its primary position (that adopted, in fact, in the conditions attached to the Commissioners’ decision and now the subject of this appeal) was not preferred by the Commissioners; and
    • (4) Critically, Mr Norton, in his own closing submissions, had expressly, and in terms (see the transcript extract at [42] above), drawn to the Commissioners’ attention the fact that there was a contest between the parties on this, now challenged, outcome (despite the fact that the experts had reached a significant measure of agreement on how this issue should be addressed).
58. Although there is no doubt that, if the Commissioners had explicitly made a choice between mandating a gas relief layer; Mr Dixon's proposed requirement (that the designer of the membrane be mandated to be informed about, and consider, the question of whether a gas relief layer should be incorporated in the design of the liner of the leachate dam or not); or omitting any requirement concerning a gas relief layer, such an outcome would not have given rise to the present controversy if they had said, consistent with the remainder of their reasoning concerning the leachate dam liner, “because such an approach would be ................”.
59. Unfortunately, they did not do so. The consequence of this is that this matter, too, requires to be remitted for further consideration. I am not to be taken to be expressing, as should be clear from the foregoing, any view whatsoever as to the merit of what should be the outcome of the remitter. The outcome may be the same or it may not - but there must be some explanation, no matter how modest, to explain sufficiently why that outcome has been reached.

Costs

60. The usual order for costs on a s 56A appeal is that they follow the event: see s 98 of the Civil Procedure Act 2005 and r 42.1 and Sch 1 of the Uniform Civil Procedure Rules 2005. There are no circumstances in this case justifying departure from the usual order. Accordingly, the EPA is to be ordered to pay the Company’s costs of the appeal.

Orders

61. It therefore follows that the orders of the Court are:
    • (1) The appeal is upheld;
    • (2) The decision and orders made by the Commissioners on 19 October 2017 are set aside;
    • (3) The proceedings are remitted to be determined by a Commissioner in accordance with this decision;
    • (4) The Respondent is to pay the Appellant’s costs of the appeal as agreed or assessed; and
    • (5) The exhibits are returned.

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