Contamination classification criteria clarified by WA Court

In the recent Western Australian Supreme Court (Court) decision of Greenland Resources Pty Ltd v Contaminated Sites Committee [2024] WASC 162, Greenland Resources Pty Ltd (Greenland) challenged, by judicial review, the decision of the Contaminated Sites Committee (Committee) to uphold a contaminated site classification of ‘Possibly contaminated – investigation required’.

This site classification has a low criterion of ‘[t]here are grounds to indicate possible contamination of the site’: Schedule 1 of the Contaminated Sites Act 2003 (WA) (Act). This classification can have a significant financial valuation effect (particularly for mortgages) given that the classification indicates the possibility of contamination which, if remediation is ultimately required, is an unquantifiable risk.

On appeal before the Committee, and on judicial review, Greenland challenged the site classification on the basis that the site was not ‘contaminated’. Greenland contended that any measurements of elevated chemicals on the site were not caused by on-site compost stockpiles but reflected local background levels for an area featuring current and historical rural activities.

The site

Greenland occupied rural land which, since 2016, had been used as a vineyard (Site) and the storage of composting stockpiles.

Adjacent to the Site was land (Adjacent Land) that a related entity of Greenland had (from 2002 to 2014) used as a compost facility. The Adjacent Land having been previously classified, under the Act, as ‘Possibly contaminated – investigation required‘ and subjected to a requirement, under Environmental Protection Act 1986 (WA), for the removal of composting stockpiles.

Causation irrelevant for site classification

Greenland contended that the Committee failed to give proper, genuine, and realistic consideration of the applicant’s ground of appeal, being that the land was not contaminated, but if it was then any contamination would be exempt under the Regulation in 5(2)(f) of the Contaminated Sites Regulations 2006 (WA) (Regulations).

The Court held that the issue of causation was irrelevant to the classification task that was performed by the Committee (in contrast to its separate role in determining responsibility for remediation when a site is classified as ‘Contaminated – remediation required‘). Consequently, the Committee did not need to form any view regarding whether the stockpiles were causative of the contamination and did not need to have regard to Greenland’s expert evidence that sought to address causation.

The Court considered that the issue of causation was only relevant at a potential subsequent stage, eg, ‘responsibility for remediation’ determination by the Committee (pursuant to a ‘Contaminated – remediation required classification’).

The Court accepted the contention of the Department of Water and Environmental Regulation (Department) that the proper approach to classifying the site as site as ‘Possibly contaminated – investigation required‘ involved:

1. there are grounds/information that need only ‘indicate possible contamination’ (given the criterion for the site classification); and
2. the effect of the definition of ‘contaminated’, means:
   1. a site will be contaminated where a relevant substance is present; and
   2. the relevant substance presents or has the potential to present a risk of harm to human health, the environment, or any environmental value.

Notably, the requirement for indicating possible contamination was distinguished from an indication of ‘probable’ contamination.

The Court held the threshold for the classification of the Site as ‘Possibly contaminated – investigation required‘ was low. Further, the Court held that, given:

• the existence on the land of compost stockpiles;
• compost stockpiles being identified in Department guidelines (that are recognised by the Act) as a potentially contaminating land use;
• the identification through onsite monitoring of elevated levels of chemicals in excess of applicable environmental standards; and
• the fertiliser exemption not being applicable to natural fertilisers (refer below),

Greenland had not demonstrated in the underlying appeal any error in the original classification decision that would have enabled the Committee to overturn the site classification. Accordingly, the judicial review proceeding was dismissed.

Fertiliser exemption excludes natural fertilisers

Regulation 5(2)(f) of the Regulations provides that a site will not be contaminated if:

• the only substance present in or on the site is a fertiliser, herbicide, or pesticide to land;
• the fertiliser, herbicide or pesticide was ‘correctly applied’ in accordance with a written law in force at the time, or a relevant recommendation of the manufacturer or distributor of the product; and
• there has not been a change in land use.

The Court construed the fertilizer exemption as being narrowly based and not extending to natural or organic products.

In part the Court considered an overly broad construction of the fertiliser exemption could undermine the legislative criteria for the definition of ‘contaminated’.

Committee classification appeals

The Court construed the provisions of the Act relating to classification appeals and found that the Committee exercises different powers, on appeal, to the Chief Executive Officer of the Department (CEO) in classifying sites under the Act. Accordingly, the Court determined that the Committee exercises ‘rehearing‘ jurisdiction and does not conduct a de novo review.

This means that in determining the appeal, the Committee is limited to the appeal grounds advanced by the appellant in its appeal notice and the applicant discharging its onus of demonstrating actual error in the original classification decision. That is, the Committee is not making a fresh decision in place of the original classification decision (ie, ‘standing in the shoes’ of the CEO) and the Committee is not making the ‘correct and preferable decision‘ (such as is made by the State Administrative Tribunal in other matters).

Contaminated site classifications, appeals and due diligence

The Greenland decision reaffirms the important nuances of the Act’s provisions (particularly relating to the powers and functions of the Committee) in regulating contaminated sites in Western Australia.

HWL Ebsworth regularly advises clients on regarding land contamination and related liabilities. Please reach out to us if you have any queries or require assistance with your land.

This article was written by Mark Etherington, Partner and Chelsea Weir, Law Graduate.