The precise form of the declaration required to give effect to this Judgment is reserved for determination after receipt of a memorandum from counsel.

The respondents are jointly ordered to pay the appellant costs of $6,000 and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Wilson J)

Introduction

[1] This appeal raises the single and narrow issue of whether used and unwanted paper acquired by contract by the appellant (“Carter Holt”) is waste for the purposes of the relevant statutory provisions authorising the making of bylaws.
[2] It is common ground that:

(a) Paper in this context includes cardboard.

(b) Paper collected by the North Shore City Council, the Waitakere City Council and the Rodney District Council (“the Councils”) by public collection is waste.
(c) If paper acquired by contract is waste, the relevant bylaws are valid.
(d) Conversely, if such paper is not waste, the bylaws are ultra vires and invalid.

Background

[3] In 2005, the Councils (effectively acting in concert) purported to pass materially identical bylaws requiring that any person who collected and transported waste must obtain a license to do so, failing which the collection and transportation would be unlawful. As a condition of such licence, the Councils purported to assume the power to impose a levy per tonne on all waste collected.
[4] In the High Court (HC AK CIV 2005-4040-4412 31 March 2006), Asher J held that the power to levy was unlawful; there is no appeal against that finding.
[5] Asher J upheld however as valid the bylaws which required the licensing of privately-acquired recyclable paper as the collection and transportation of waste.
[6] In the High Court, the validity of such bylaws was challenged by Carter Holt not only as ultra vires but also on the grounds of uncertainty and unreasonableness. Those alternative grounds are not advanced on appeal.
[7] Carter Holt is the largest manufacturer of paper products in New Zealand and, to a substantial extent, manufactures such products out of recyclable paper.
[8] That paper is acquired in part from public collections, such as kerbside collection by territorial authorities or from recycling centres; as previously noted, it is common ground that paper so acquired is waste.
[9] Carter Holt also enters into various private contractual arrangements throughout New Zealand to obtain recyclable paper from those who own that material, such as large supermarkets. That paper is transported directly from the premises of the former owner to Carter Holt’s recycling operations, none of which are located within the Councils’ districts.
[10] The bylaws under challenge include the following definitions:

“Paper Waste” means any paper, cardboard, or any other paper based waste but does not include Household Waste, Commercial Waste, Prohibited Waste, Hazardous Waste or Trade Waste.

“Commercial Waste” means any Solid Waste resulting from the carrying on of any business, manufacture, process, trade, market, or other undertaking and includes Recyclable Waste which is not accepted by the Council for separate collection, Paper Waste, Inorganic Waste or Green Waste but does not include Commercial Household Waste, Prohibited Waste, Hazardous Waste or Trade Waste.

[11] The Councils contend that, insofar as unwanted paper is collected from private residences, it falls within the definition of paper waste and, insofar as it is the by-product of a business, it is commercial waste.

Statutory authority

[12] The bylaws under challenge were made pursuant to sections 145 and 146 of the Local Government Act 2002 (“the 2002 Act”) and section 542 of the Local Government Act 1974 (“the 1974 Act”).
[13] Section 145 of the 2002 Act confers general bylaw-making powers on the Councils.
[14] Section 146(a), without limiting section 145, confers on the Councils the specific bylaw-making powers of regulating waste management (s 146(a)(ii)) and solid wastes (s 146(a)(iv)).
[15] Part 31 of the 1974 Act, which addressed waste management, continued in force notwithstanding the enactment of the 2002 Act.
[16] Section 542 of the 1974 Act specifically confers on the Councils the power to make bylaws for prescribed purposes involving waste management as follows:

Bylaws-

(1) Without limiting the powers of the council to make bylaws under section 684 of this Act, a territorial authority may from time to time make bylaws for all or any of the following purposes:

(a) Prohibiting or regulating the deposit of waste or of waste of any specified kind:

(b) Regulating the collection and transportation of waste or waste of any specified kind:

(c) Regulating the mode of disposal of dead animals:

(d) Prescribing charges to be paid in respect of the public use of waste management facilities provided, owned, or operated by the territorial authority:

(e) Prohibiting, restricting, and controlling public access to waste management facilities provided, owned, or operated by the territorial authority:

(f) Prohibiting the removal of waste intended for recycling from receptacles provided by the territorial authority by anyone other than the occupier of the property from which the waste in the receptacle has come or a person authorised by the territorial authority to remove such waste.

(2) Bylaws made under subsection (1)(b) of this section may provide for the licensing of persons who carry out commercially the collection and transportation of waste or waste of any specified kind, and the conditions specified in any such bylaws as conditions of the licenses may include conditions requiring each licensee-

(a) To provide a suitable works performance bond or security for the performance of the work licensed or both:

(b) To provide to the territorial authority, at times or periods specified in the bylaws, reports setting out-

(i) In accordance with criteria specified in the bylaws, the quantities and types of waste collected and transported under the license:

(ii) Both the source and the destination of the waste collected and transported under the license.

[17] Neither the 1974 Act nor the 2002 Act contains a definition of waste.

Submissions for Carter Holt

[18] Recyclable paper provided by its owner to Carter Holt pursuant to private commercial arrangements is not waste within the meaning of the relevant empowering provisions of the 1974 Act and the 2002 Act. Asher J did not give effect to the distinction, at all times accepted by Carter Holt, between recyclable material which is actually discarded and which is waste and recyclable material which is not discarded but which is acquired for consideration by Carter Holt under private commercial arrangements. Carter Holt has at all times contended that this material is not waste.
[19] Discarded paper is not waste for the purposes of the legislation unless and until it has been discarded; that is, the owner has abandoned all right to ownership and all interest in the material by some overt act such as leaving it in a public place as a kerbside for collection and disposal by the Councils.
[20] That interpretation is consistent with dictionary definitions, such as the Shorter Oxford English Dictionary definition of waste as “waste matter, refuse: unusable material left over from the process of manufacture, the use of consumer goods, etc: the useless by-product of a process: material or manufactured articles so damaged as to be useless or unsaleable”.
[21] Private persons who own material, even if no longer wanted by them, are legally entitled to enter into private arrangements to transfer (for value or otherwise) to a recipient who has some use for it and for whom it has some value.
[22] The licence fees and other compliance costs associated with licensing significantly reduce the value to Carter Holt of the paper which it collects.

Submissions for the Councils

[23] Relevant provisions in the 1974 Act and the 2002 Act contemplate material which has been recycled as being waste, notwithstanding that the material might have some value as a commodity or could be processed to produce new products. Indeed, that is at the very essence of recyclable waste.
[24] Given that recycling is such an integral part of the waste management process and hierarchy, recyclable waste material must be waste. Therefore, given the encompassing nature of the recyclable waste definition, there can and should be no distinction drawn between public and private waste collection.
[25] By parity of reasoning, the judgment of Laurenson J in Manukau City Council v Attorney-General (HC AK M1054-IM 99 8 February 2000) applies because the Judge there held that, for the purposes of Part 31 of the 1974 Act, waste includes waste water.
[26] Section 542 of the 1974 Act specifically provides for the licensing of persons who carry out “commercially” the collection and transportation of waste of any specified kind. It is this provision that the Councils primarily rely upon to license Carter Holt and other recyclable waste collectors because they both collect and transport recyclable paper waste in the districts of the Councils.
[27] There is nothing in either s 537 or s 539 which states or implies a limitation to discarded material; to the contrary, there is no reference in either the 1974 Act or the 2002 Act to the concept of waste as discarded material.
[28] The statutory provisions must prevail over any dictionary definition but, in any event, Asher J was correct to adopt the definition of waste in the New Zealand Oxford Dictionary as “superfluous, no longer serving a purpose ...”.
[29] It is irrelevant whether or not Carter Holt pays to acquire waste paper. The only difference between private and public collection is that businesses leave the recyclable waste for collection by Carter Holt from their premises.
[30] Asher J was correct in finding as a matter of fact that Carter Holt will not be greatly disadvantaged by having to pay a $300 per year licence fee and provide waste information as required by the bylaws under challenge.
[31] In the course of argument, members of the Court raised with Mr Kirkpatrick the questions of how waste could be defined so as to exclude, first, primary produce which is sold for processing and, secondly, second-hand goods which are sold or given to a charity.
[32] Having reflected on these issues during the luncheon adjournment, Mr Kirkpatrick submitted that waste should be defined as:

any product or material that is disposed of by its owner and cannot be reused in its existing form for its original or similar purposes.

Is used and unwanted paper sold for consideration waste?

[33] Whether the paper is waste for the purposes of the Local Government Acts 1994 and 2002, it became apparent in the course of argument, depends on whether that term is defined as material which is abandoned by its owner (Carter Holt’s contention) or whether its meaning extends to any material which is disposed of, provided that it cannot be re-used in its existing form for its original or similar purposes (the Councils’ position).
[34] The various statutory provisions and the competing dictionary provisions to which we were referred do not in our view assist in choosing between these definitions. Nor does the Manukau City decision, which was concerned with the different question of whether wastewater was waste.
[35] We prefer the definition proposed by Carter Holt. The test of whether a former owner has abandoned material does we think accord with common usage and common sense. It also provides a clear and practical way of distinguishing between what is waste and what is not.
[36] In the case of used and unwanted paper, paper which is left at the kerb for collection or delivered to a recycling centre has obviously been abandoned by its former owner and is therefore waste. The paper which Carter Holt acquires by contract has, equally clearly, not been abandoned and is therefore not waste. In essence, Carter Holt acquires a second hand good for consideration rather than collecting waste.
[37] In contrast to Carter Holt’s proposed definition, the Councils’ definition seems to us to be uncertain, difficult to apply and likely to lead to unintended consequences. For example, glass bottles which were abandoned but which were collected to be re-used after washing would not qualify as waste because they would be used in their existing form for the same purpose. Difficulties would also arise in determining the point at which the proposed purpose differs from the original or similar purposes.

Result

[38] The used and unwanted paper (including cardboard) which Carter Holt acquires by contract is not waste for the purposes of the Local Government Acts 1974 and 2002 because it has not been abandoned by its former owners.
[39] It follows that the Councils’ bylaws which require the licensing of the collection and transportation of that paper are ultra vires and invalid.
[40] The appeal is therefore allowed.
[41] In its Notice of Appeal, Carter Holt sought declarations that:

recyclable paper provided by its lawful owner to the appellant pursuant to private commercial arrangements is not waste within the meaning of Part 31 of the Local Government Act 1974 and the Local Government Act 2002.

the word waste in Part 31 of the Local Government Act 1974 and the Local Government Act 2002 does not include material that is surplus to its owner’s requirements and may become waste unless it is reused or recycled;

the word waste in Part 31 of the Local Government Act 1974 and the Local Government Act 2002 does not include material that is no longer wanted by its owner and which, but for commercial or other initiatives to recycle it, would be discarded;

the word waste in Part 31 of the Local Government Act 1974 and the Local Government Act 2002 is limited to material that is actually discarded by its owner;

the word waste in Part 31 of the Local Government Act 1974 and the Local Government Act 2002 does not include material that has been used by its owner and would otherwise be discarded but is instead privately recycled or reused.

[42] We reserve the precise form of the declaration required to give effect to this Judgment. We direct that a joint memorandum be filed within 14 days of delivery of this decision. The memorandum should set out either an agreed position or the respective positions of the parties on the form of the declaration. A supplementary judgment will be issued to confirm the form of the declaration.
[43] Formally, we reserve leave to Carter Holt to apply for a declaration or declarations.
[44] The Councils are jointly ordered to pay Carter Holt costs of $6,000 and usual disbursements.
[45] We certify for second counsel.

Solicitors:
Bell Gully (Auckland) for appellant
Kensington Swan (Auckland) for respondents

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZCA/2007/420.html