The purpose of this article is to analyze the circumstances of the case of Macquarie Generation v Hodgson[1] on behalf of Ms Hodgson and seek a remedy under the Protection of the Environment Operations Act 1987 (NSW) (‘POEO Act’). This is a case of whether there is a duty of care to take reasonable care to reduce the level of emissions which is harmful to the environment. The New South Wales Court of Appeal has held that there is no implied condition in Macquarie Generation’s (‘MG’) environment protection licence issued under the POEO Act to limit the total amount of CO2 to be emitted into the atmosphere.

MG is and was a state owned corporation constituted by s4 of the Energy Service Corporation Act 1995 (NSW) (‘ESC Act’)[2] and is able to sue or be sued in its corporate name. At all material times, MG carried on the business of the wholesale generation of electricity in particular from a coal-fired power station known as the Bayswater Power Station situated at New England Highway, Muswellbrook, NSW (‘Bayswater Power Station’).

The latest judgment overturns Pain J’s decision in the New South Wales Land and Environment Court (‘Environment Court’) where her Honour held that the applicant could bring a claim against MG’s licence to burn coal which was subject to an implied condition which limited its emission of CO2 and to restrain MG from emitting an amount of CO2 which harmed or was likely to harm the environment in contravention of section 115(1) of the POEO Act.[3] 

Nature of the proceedings

Gray No 1- the respondent’s motion for dismissal of proceedings[4]

The applicants bought civil enforcement proceedings pursuant to s252 of the POEO Act[5] in Gray No 1,[6] seeking a declaration that the Respondent willfully or negligently disposed of waste by the emission of CO2 into the atmosphere in a manner which harmed or was likely to harm the environment contrary to s115 (1) of the POEO Act.[7]

Applying this case to the current factual scenario, if MG had lawful authority to emit CO2 which is denied, it could be argued that the limits of that authority are to be implied from the Environment Protection Licence. Further or in alternative, even if MG has lawful authority to emit CO2 at the Bayswater Power Station, it is only authorised to emit CO2 in a manner that has reasonable regard and care for the interests of other persons and/or the environment.[8]

Gray No 2-Macquarie Generation’s application for costs[9]

In Gray No 2, the court held that the litigation was brought in the public interest and it was appropriate in the circumstances that each party pay its own costs. The court dismissed the application.[10]

Gray No 3- the Applicants’ motion for leave to rely on a further amended summons and points of claim[11]

In Gray No 3,[12] following the orders made in Gray No 1,[13] Pain J determined the Applicants’ application for leave to further amend its summons and points of claim pursuant to s 64(1) and (2) of the Civil Procedure Act 2005 (Cth).[14] The applicants further amended their points of claim in Gray No 3[15] on the grounds pleaded in Gray No 1 set out at [9]-[16][16] to Gray No 3 at [22]-[31][17] that Pain J observed that the Applicants’ claim was that the standard of care for persons or the environment identified in Van Son[18] was an implied limitation on the statutory authority conferred by the liecence and under the POEO Act.[19] As in Gray No 1,[20] the applicants established that its cause of action was a civil action in nuisance seeking damages where a defence of authorization by statutory authority of the activity giving rise to the nuisance was raised.[21] MG, the respondent, on the other hand, opposed leave being granted pursuant to UCPR r 14.28[22] on the basis that there was tendency to cause embarrassment and prejudice and the statement of claim disclosed no reasonable cause of action which was an abuse of court processes. MG further submitted that there was no legally enforceable upper limit of the volume of CO2 which could be emitted from Bayswater Power Station. For the reasons set out at [65]-[85],[23] the court exercised its discretion to allow the Applicants’ amendment to the pleadings. By doing so, Pain J accepted the Applicant’s view of whether there was an implied limitation in a licence condition under the POEO Act.

 

 

[1] [2011] NSWCA 424; (2011) 186 LGERA 311.

[2] Energy Service Corporation Act 1995 (NSW), s4.

[3] Protection of the Environment Operations Act 1997 (NSW), s115(1).

[4] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1).

[5] Protection of the Environment Operations Act 1997 (NSW), s252.

[6] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1).

[7] Protection of the Environment Operations Act 1997 (NSW), s115(1).

[8] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1), 54A.

[9] Gray v Macquarie Generation (No 2) [2010] NSWLEC 82; BC201003551 (Gray No 2).

[10] Ibid.

[11] Gray v Macquarie Generation (No 3) [2011] NSWLEC 3; BC201101002 (Gray No 3).

[12] Ibid.

[13] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1).

[14] Civil Procedure Act 2005 (Cth), s64(1), s64(2).

[15] Gray v Macquarie Generation (No 3) [2011] NSWLEC 3; BC201101002 (Gray No 3).

[16] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1), [9]-[16].

[17] Gray v Macquarie Generation (No 3) [2011] NSWLEC 3; BC201101002 (Gray No 3), [22]-[31].

[18] Van Son v Forestry Commission of New South Wales (1995) 86 LGERA 108.

[19] Protection of the Environment Operations Act 1997 (NSW), 68.

[20] Gray v Macquarie Generation [2010] NSWLEC 34; BC201001539 (Gray No 1).

[21] Ibid, 73.

[22] Uniform Civil Procedure Rules 2005 (NSW), r14.28. 

[23] Gray v Macquarie Generation (No 3) [2011] NSWLEC 3; BC201101002 (Gray No 3), [65]-[85].

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