Safety-Kleen UK Ltd v The Environment Agency
| Jurisdiction | England & Wales |
| Judge | Sir Duncan Ouseley |
| Judgment Date | 20 November 2020 |
| Neutral Citation | [2020] EWHC 3147 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Date | 20 November 2020 |
| Docket Number | Case No: CO/4688/2018 |
[2020] EWHC 3147 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMINISTRATIVE COURT
PLANNING COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Sir Duncan Ouseley Sitting as a High Court Judge
Case No: CO/4688/2018
David Hart QC and Hannah Noyce (instructed by Weightmans) for the Claimant
Richard Moules (instructed by the Environment Agency Legal Services Department) for the Defendant
Hearing dates: 20 October 2020
Approved Judgment
Safety-Kleen UK Ltd, the Claimant, provides specialist mechanical parts washers, containing kerosene, to businesses, such as those undertaking automotive repairs and to small engineering businesses. They are used for cleaning the parts of heavy oil, grease, paint, ink, glues and resins. The machines enable a cleaning process by physical means, such as scrubbing and automatic agitation with kerosene, and by kerosene acting as a solvent. Safety-Kleen collects the used kerosene from its customers in drums and replaces it with cleaned kerosene. Safety-Kleen takes the drums of used kerosene back to a depot, empties them into a sump or reservoir and then rinses out the drums with used kerosene from the reservoir, to which the now reused kerosene returns. From there, the re-used kerosene is pumped into the “dirty” tanks, whence it is tankered away to a different company for a specialised industrial waste recovery or regeneration process, by which the dirty kerosene is distilled and cleaned. The cleaned kerosene is returned to a Safety-Kleen depot, and placed into the cleaned drums. These are the drums which are then taken to customers, when it is time for the kerosene they have used to be removed once more.
There was no issue but that the dirty kerosene, when it reached the “dirty” tanks at the depot was “waste”, within the Waste Framework Directive, 2008/98/EC, WFD, and remained waste when transferred to the depot for distillation and waste until it was cleaned for re-use by customers. Until 2017, there had been no issue between Safety-Kleen and the Environment Agency but that the used kerosene was waste when it was collected by Safety-Kleen from its customers' premises. However, in 2017, stimulated or not by the high cost of the application of the waste legislation, Safety-Kleen considered whether the used kerosene was truly waste at that stage. It concluded that it did not become waste until it had been used for the cleaning of the drums back at the depot, and was sent to the “dirty” tanks, to await removal for recovery or regeneration. The Environment Agency considered the case made by Safety-Kleen; it also inspected the drum cleaning process at a depot. But it decided in a written decision dated 24 August 2018, that the used kerosene became waste when collected from the customers' premises, and remained waste until cleaned. It is that decision which is now challenged by of way of judicial review.
Permission was refused on paper and on renewal by respectively Holgate and Lieven JJ. It was granted on appeal by Lewison LJ, in November 2019.
Mr Hart QC for Safety-Kleen raised three grounds of challenge. The Environment Agency was wrong to treat the used kerosene as waste when collected from the customers' premises. First, proper consideration of all the factors in this particular case, relating to the way in which Safety-Kleen used the kerosene back at the depots to rinse the drums, should have led to the conclusion, and should lead the Court to conclude, that it was not waste until it was sent to the “dirty” tanks. Second, the Environment Agency erred in its understanding of the cleaning process used by Safety-Kleen at its depots and of its similarity to the cleaning process at its customers' premises. Third, the Environment Agency had accepted that cloth wipes, impregnated with kerosene, which Safety-Kleen supplied to its customers were not waste when collected from them by Safety-Kleen for cleaning and re-use by its customers, and did not become waste until so used that they had to be thrown away. It was irrational to distinguish the cloth wipes, after use, from the kerosene, after use by the customers.
Mr Moules for the Environment Agency submitted that the issues had been carefully considered; the Environment Agency had formed a view on technical matters which deserved a wide margin of appreciation, and its conclusion was correct. There had been no error of fact and the cloth wipes were not comparable to the used kerosene, nor was that comparison useful in resolving the point at which the used kerosene became waste.
The nature of the issue before the Court
Although these are judicial review proceedings, they are unusual in this respect. The parties agreed that the question for the Court was not whether the decision of the Environment Agency was rational, or whether some material consideration had been ignored or an immaterial consideration had been taken into account. Nor was the question whether the EA had directed itself correctly on the meaning of the term “waste”, and had reached a view as to its application which was reasonably open to it. It was instead for the Court to decide whether, in all the circumstances of the case, the used kerosene was “waste” when collected by Safety-Kleen from its customers, or “waste” only after it had been re-used in the cleaning of the drums at the depot. If the Environment Agency decision was right, it was lawful; and if wrong, it was unlawful. This meant that the Court, in reaching its own decision, could also consider material which was not before the Environment Agency when it made its decision.
This approach follows R (OSS Group Ltd) v Environment Agency [2007] EWCA Civ 611, [2007] Bus LR 1732. Carnwath LJ, with whom Sir Anthony Clarke MR and Maurice Kay LJ agreed, said at [59]: “What is required from the national court is a value judgment on the facts of the particular case in the light of those indicators.” “Those indicators” are the objective indicators derived from the policy of the WFD.
Mr Moules emphasised that the concept of “waste” had to be interpreted and applied purposively having regard to the objectives behind the WFD. This was not controversial; see ARCO Chemie Nederland Ltd v Minister van Volkshuisvesting C418 and 419/97 [2002] QB 646. The objectives are expressed differently to a degree in the 2008 WFD, although I accept that the objectives of the WFD mean that the concept of “waste” should not be interpreted restrictively in the light of the precautionary principle, and the need for a high level of environmental protection should be recognised. The recitals to the WFD note the need for greater clarity in definitions including that of “waste”, but it is Article 1 which states the fundamental objective:
“The Directive lays down measures to protect the environment and human health by preventing or reducing the adverse impacts of the generation and management of waste and by reducing overall impacts of resource use and improving the efficiency of such use.”
Mr Moules also contended that, in reaching a value judgment on the facts, the Court ought to afford an enhanced margin of appreciation to the judgment of an expert regulator making a specialist judgment on issues of a scientific, technical or predictive nature, or on issues involving a balance between competing interests; see R(Mott) v Environment Agency [2016] EWCA Civ 562, [2016] 1 WLR 4338, at [74–82], Beatson LJ, with whom Lord Dyson MR and McFarlane LJ agreed. This was said in the context of a rationality challenge, which is not the case here. However, Mr Hart did not contest the principle or that it should apply to the Environment Agency's views as to environmental risk, but he did not accept that all the views formed by the Environment Agency in the course of its decision, or in its consideration of subsequent evidence, could properly be regarded as technical, scientific, predictive judgments or as the result of a regulator making a decision weighing competing interests. This arose notably in the assessment of what happened during, and the significance of, the drum rinsing process.
The Waste Framework Directive and its interpretation
Although the Environment Permitting (England and Wales) Regulations 2016 S.I. 1154, transpose the WFD into domestic law, the important legislation for these purposes is the WFD itself. Safety-Kleen has the necessary permits for the waste operations which it carries out at its depot. The issue arises, in particular, over the collection and transportation of the used kerosene from customer to depot. If “waste”, the used kerosene was “hazardous” within the scope of Annex III to the WFD as flammable, toxic, probably carcinogenic and perhaps more besides, depending on the contaminants. Clean kerosene is of course flammable and toxic, but it is not carcinogenic. The Hazardous Waste (England and Wales) Regulations 2005 S.I. No. 894, HWR, would apply, and, among other obligations, hazardous waste consignment notes would be required for each consignment of used kerosene. The fees for the hazardous waste consignment notes would cost Safety-Kleen in the order of £250000 a year. It intends, if the used kerosene is not waste, to seek the recovery of over £2m paid in back fees.
The resolution of the issue, of whether the used kerosene is “waste” when collected, takes one straight from the Environment Permitting Regulations to the WFD for the definition of waste and other relevant definitions. The definitions are in Article 3 WFD. “(1) ‘Waste’ means any substance or object which the holder discards or intends or is required to discard. (6) ‘Waste holder’ means the waste producer or the natural or legal person who is in possession of the waste.”
This language has been considered by the CJEU and the Courts of the UK,...
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