Climate change action group Rising Tide has failed in its
attempt to curtail Macquarie Generation's emission of
CO2 from the Bayswater power station using NSW pollution
laws (Clayton Utz acted for Macquarie Generation in the
The basis of Rising Tide's claim was that there was an
implied condition or limitation in Macquarie Generation's
environment protection licence issued under the Protection of
Environment and Operations Act 1997 (PEO Act) to
limit the total amount of CO2 that could be emitted into
the atmosphere. The action group alleged that the implied condition
required Macquarie Generation to only emit an amount of
CO2 which had "reasonable regard and care for the
interests of other persons and/or the environment." It also
alleged that there was a limitation on the amount of coal that
could be burnt at the power station, based on a statement contained
in the 1980 environmental impact statement for the power
The NSW Land and Environment Court had previously held that
Macquarie Generation did have lawful authority to emit carbon
dioxide,but that it was reasonably arguable that the authority
conferred by the licence was subject to an "implied" or
"common law" limitation or condition which prevented
Macquarie Generation from emitting CO2 in excess of such
This morning, the Court of Appeal upheld Macquarie
Generation's appeal and dismissed the remainder of Rising
Tide's claim, holding that there were no implied conditions
implied conditions of this sort are inconsistent with the
statutory regime for licensing activities under the PEO Act;
a limitation on the amount of coal which could be burnt at the
power station, by reference to a single statement in the
environmental impact statement, could not be implied as a licence
It also held that a statutory breach could not be founded on a
common law cause of action.
What does this mean for licence-holders under the PEO
The judgment makes clear that the test for implying statutory
conditions is analogous to that of implying conditions in a
contract and that relevantly, conditions will not be implied into a
licence unless they can be shown to be necessary, obvious, clear
and consistent with the express terms of the licence. The Court
will not imply a condition which is inconsistent with the statutory
regime within which it operates.
The judgment provides much needed certainty to holders of
licences authorising specific activities, that the terms of that
licence won't be subject to arbitrary implied conditions or
limitations which are inconsistent with statutory regime under
which they are issued.
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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