In the case of Crush and Haul Pty Ltd v Environment Protection Authority [2023] NSWLEC 60, although the defendant was initially denied an EPL due to a prior conviction, the court ultimately determined that this was not sufficient, granting the licence subject to conditions.

The NSW Land and Environment Court’s (LEC) recent decision in Crush and Haul Pty Ltd v Environment Protection Authority [2023] NSWLEC 60 makes clear that the issue of general terms of approval by the NSW EPA as part of an application for integrated development under the Environmental Planning and Assessment Act 1979 (EP&A Act) does not guarantee that an environmental protection licence (EPL) will ultimately be issued by the EPA.

Background

Crush and Haul Pty Limited (Crush and Haul) applied for an EPL in September 2022 for the scheduled activity of ‘extractive activities’ at their quarry in Dirty Creek, for which development consent had been granted by Coffs Harbour City Council in November 2020 (Consent). The EPA had provided its general terms of approval in response to the development application prior to the grant of the Consent.

In November 2022, the EPA issued a letter notifying Crush and Haul of its intention to refuse the application for an EPL, on the basis that Crush and Haul was not a “fit and proper person” to hold an EPL, as is required by section 45(f) of the Protection of the Environment Operations Act 1997 (POEO Act). The EPA came to this conclusion following the conviction in September 2022 of Crush and Haul and its sole director of the offence of failing to hold an EPL to carry out a scheduled activity when it processed 30,000 tonnes of material from the Dirty Creek Quarry between January 2018 and December 2018.

Section 4.50(1) of the EP&A Act provides that an approval body must, in respect of integrated development for which development consent has been granted following the provision by the approval body of the general terms of the approval, grant approval to any application for approval that is made within three years after the date on which the development consent is granted if, within that three year period, the development consent has not lapsed or been revoked.

First case – could EPA consider fit and proper person test?

Crush and Haul launched class 4 proceedings in the LEC seeking a declaration that the EPA was required, by operation of section 4.50(1) of the EP&A Act, to issue an EPL, subject to conditions not inconsistent with the original development consent.

The issues for determination were:

1. whether the effect of section 4.50(1) of the EP&A Act was that the EPA was required to issue an EPL to Crush and Haul, subject to conditions that were not inconsistent with the Consent;
2. whether the EPA was permitted to consider whether Crush and Haul was no longer a fit and proper person when determining its application for an EPL; and
3. what relief, if any, the LEC should grant in the exercise of its discretion.

Decision

The LEC ultimately dismissed Crush and Haul’s claim, finding that section 4.50(1) of the EP&A Act does not compel the EPA to issue an EPL following the grant of development consent to an application for integrated development.

The LEC held that the EPA has distinct powers when making a decision about whether general terms of approval should be issued in relation to a development application made under the EP&A Act, as compared to when determining whether to issue an EPL under the POEO Act. Justice Pritchard held that Crush and Haul’s construction of section 4.50(1) would have “render[ed] nugatory the obligation imposed by s 45(f) of the POEO Act”, and “to impose an obligation on the EPA to issue an environment protection licence to an applicant it considers not to be a fit and proper person would be inimical to the attainment of [the] objects [of the POEO Act]”.

Second case – was Crush and Haul a ‘fit and proper person’?

After Justice Pritchard handed down her decision, the LEC then heard Crush and Haul’s appeal against the EPA’s deemed refusal of its application for an EPL in Crush and Haul Pty Ltd v Environment Protection Authority [2023] NSWLEC 1367. In this case, the LEC stood in the shoes of the EPA and determined Crush and Haul’s application for an EPL.

The LEC found that:

• As far as the applicant for the EPL – Crush and Haul – was concerned, one conviction, which did not result in environmental harm and which was found to be of low to medium objective seriousness, is not determinative, on its own, that a person is not a “fit and proper” person to hold a Licence under the POEO Act.
• As far as the single director of Crush and Haul was concerned, a single conviction, which did not result in environmental harm and which was found to be of low objective seriousness, is not determinative of the Applicant, through its sole director, being a “fit and proper” person to hold a Licence under the POEO Act.

The Court accordingly granted consent to Crush and Haul’s application for an EPL, subject to conditions.

Implications

This case makes clear that the grant of an integrated development consent, may not be as certain as once thought, as an approval body may refuse to grant the final approval, particularly if there has been a significant change in circumstances.

The decision also serves as an example of the unexpected ways in which a criminal conviction can have ramifications for actual and potential environmental licence holders, particularly where the fit and proper person test must be satisfied.

Jennifer Hughes, Madeleine O’Connor