NSW Court of Appeal upholds validity of Waste to Energy regulation -but Malouf still not down and out.

The NSW Court of Appeal dismissed the appeal by Ian Malouf’s The Next Generation (TNG) Pty Ltd against the NSW Land and Environment Court’s finding that the NSW Energy to Waste regulation is valid.


The Independent Planning Commission (IPC) refused TNG’s application to build a Waste to Energy Incinerator at Eastern Creek in 2018. TNG appealed to the NSW Land and Environment Court in 2019. Four years later, that appeal is yet to be heard. It is scheduled to be heard later this year.

In the meantime, the NSW LNP government passed the NSW Energy to Waste regulation that established several regional precincts for Waste to Energy – none of which are in the Greater Sydney Basin.

The IPC informed the Land and Environment Court that it would argue in the appeal that the Land and Environment Court could not grant approval because the Waste to Energy regulation amounted to a ban on waste to energy incinerators in the Greater Sydney Basin.

TNG then stepped sideways and initiated a separate case in the Land and Environment Court. It challenged the validity of the regulation and lost. It appealed against that decision to the NSW Court of Appeal.

Court of Appeal decision

Last week, three judges of the Court of Appeal, Justice Meagher, Gleeson and Beech-Jones found the regulation was valid. They dismissed TNG’s appeal and awarded costs against TNG.

However they agreed with Land and Environment Court Chief Judge Preston that the Energy to Waste regulation did not override the NSW Environmental and Planning and Assessment Act that provides in Section 4.42 that a State Significant project that is approved can’t be refused a licence to operate. (TNG is a State Significant project which does not yet have approval. It has appealed against the Independent Planning Commission’s refusal to approve its proposal. The Land and Environment Court will make the final decision on whether it is approved or not.)

This means that even though TNG lost its validity argument, both Judge Preston and the Court of appeal appeared to leave TNG a possible route through to approval.

However it is not that simple. Chief Justice Preston’s judgement highlighted the State Significant gap in his judgement on November 24, 2022. Three weeks later, the NSW government made a further change to the regulation – this change is called Division 28. It can be found in the State Environmental Planning Policy (Transport and Infrastructure) 2021. (If you are interested in knowing how you can trace the development of legislation, use the panel at the top of the page – legislative history.) Division 28 attempts to rule out the possible State Significant avenue to approval by making it clear that the Thermal to Waste regulation will override the provisions of any other environmental planning instrument. Although it is not explicitly stated, one assumes this includes the State Significant provisions in the EPA Act.

Division 28 states:

This section prevails to the extent of an inconsistency over—(a)  another provision of this Policy, and

(b)  the provisions of another environmental planning instrument.

But instead of deciding whether this would rule out all possible avenues for TNG, the Court of Appeal decided that the implications of Division 28 would have to be left to the NSW Land and Environment Court to decide.

And so once again, the residents who have been fighting this proposal for 7 years are left uncertain about where all these legalities and costly litigation are headed. The courts have ordered Malouf to cover the costs of the validity challenge but he has deep pockets.

While all these court proceedings have been underway, he has been building his property portfolio and yacht charter business.

Malouf’s chances look slim. He could finally throw in the towel – but on the other hand, he is extremely rich and he may well consider that he has spent so much money that he might as well continue with the NSW Land and Environment Court appeal.

Just as CEM was about to publish this report, we heard that the appeal is listed for a directions hearing in the NSW Land and Environment Court on August 2. CEM will update this report soon.

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