knowledge 13 April 2016 |

Court of Appeal Confirms that Waste Licences can only be Transferred in Accordance with the Statutory Scheme

The recent judgment in Environmental Protection Agency v Midlands Scrap Metal Company Ltd ¹ will be of interest to waste licence holders and those operating licensed facilities. The question arising for decision was whether a waste licence granted to a particular operator under the terms of the Waste Management Act 1996 (“the Act”) was personal to that operator or whether another entity might be lawfully permitted by that licence to operate the waste facility in question.

Background

Midland Scrap Metal Company Ltd (“Midland Scrap”) was convicted in the District Court of an offence contrary to s39(1) and s39(9) of the Act of disposing of or undertaking the recovery of waste at a facility other than in accordance with a waste licence granted under the Act. A waste licence existed in respect of the facility but it had been issued to a different company, Greenstar Materials Recovery Ltd (“Greenstar”), who had ceased operations there. Midland Scrap had then taken over the facility and had recommenced activity which itself did not comply with Greenstar’s licence conditions.

In its defence, Midland Scrap had argued that Greenstar remained the licensee. As such, Greenstar was obliged to comply with the licence conditions and was liable for any breaches of the licence. Midland Scrap stated that it operated the facility by way of private licence or agreement from Greenstar and under Greenstar’s waste licence. It was pointed out that Greenstar had been prosecuted in respect of Midland Scrap’s activities, pleaded guilty and was convicted and fined. This was a recognition that the activities were being carried out under Greenstar’s licence, albeit not in compliance with the conditions of that licence.

Midland Scrap had pointed to the wording of s39(1) of the Act which provides:

“(1) …[A] person shall not dispose of or undertake the recovery of waste at a facility, on or after such date as may be prescribed, save under and in accordance with a licence under this Part …that is in force in relation to the carrying on of the activity concerned at that facility.”

It had argued that there was nothing in the provision which imposed an obligation on a person to hold a licence but the obligation was rather instead to carry out the activity in accordance with a licence and that the arrangement between the two companies here was common within the industry.

Decision of the Court

The Court of Appeal rejected these arguments holding that when considering s39 in isolation and the Act as a whole, it was difficult to avoid the conclusion that a waste licence was personal to the holder and not transferable by private arrangement. There were three fundamental reasons for this:

• s39(1) was careful to use language that presupposed that the licence was awarded to a particular entity by the EPA. If that licence could be transferred unilaterally by Firm A to Firm B, it would be hard to say that Firm B was operating “under and in accordance with” that licence since it had never been awarded to Firm B in the first place;
• s40 of the Act required proof of the personal fitness of the proposed licensee. It was necessarily implicit from s40 that the licence was personal to the holder. If it were otherwise, this section could be readily circumvented through the expedient of some form of private licensing system as between the holder of the licence and its delegate; and
• s47 of the Act envisaged the transfer of a licence to another person or entity, but only by means of a statutory procedure which itself involved a review of the proposed transferee’s fitness and suitability. The only possible reading of this was that a licence was personal and that it was not simply the activity which was licensed. Rather it was the identified activity to be carried out by the licensee which was licensed. Moreover, the fact that the Oireachtas provided for this scheme of statutory transfer excluded by necessary implication a purely private arrangement between the holder of the licence and a proposed transferee.

The court concluded that while there might be no express prohibition on the private transfer of licences between a licensed holder and third parties, this was, if not impliedly prohibited, at least rendered ineffective in law by the Act. Any other conclusion would undermine the entire objective and scheme of the Act which, in common with most licensing regimes of this kind, necessarily envisaged that the grant of any statutory licence would be personal to the holder.

Comment

This decision affirms the High Court decision from January 2015 and upholds the position that the transfer of waste licences should be carried out with the consent of the EPA in accordance with the statutory scheme set out in the Act.

The statutory scheme for waste licences in the Act and the licensing scheme under the Environmental Protection Agency 1992 (as amended) are similar, although the specific wording in the 1992 Act requiring a person to have a licence is different. Therefore, the principles in this case would have to be taken into consideration by the EPA and licence holders under that regime.

Also, if, as the case suggests, the practice of a third party operating “under and in accordance with a licence” is common, the EPA and these “third party” holders of licences issued by the EPA will need to revisit their licence status and compliance.