Cleanaway Loses Victorian Court Case Over Landfill Levy Classification
Victorian Supreme Court rules against Cleanaway in landfill levy dispute
Cleanaway Waste Management has received an adverse ruling from the Victorian Supreme Court regarding alleged historical underpayment of landfill levies at its Melbourne Regional Landfill facility. The court ruled in favour of the Environment Protection Authority (EPA) in proceedings concerning the FY18 period, finding that materials purchased from an adjacent Boral quarry for landfill operations constitute “waste” subject to landfill levies. The company has 42 days to decide whether to appeal the decision.
The core dispute centred on whether quarry materials purchased by Cleanaway from Boral for use in landfill operations should be classified as “waste” attracting state government landfill levies. Cleanaway defended the proceedings on the basis that the product type purchased from Boral is not waste to which landfill levies should apply. The Supreme Court disagreed with this interpretation.
The alleged underpayment for FY18 amounts to $6.9 million. This ruling establishes a legal precedent on how “waste” is defined for levy purposes, with potential flow-on implications for similar operational arrangements at landfill facilities.
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What is the landfill levy and why does it matter?
Landfill levies are state government charges applied per tonne of waste deposited at landfill sites. The levies are designed to discourage landfilling and encourage recycling and resource recovery, with Victoria operating among the highest landfill levy regimes in Australia.
The legal question centred on whether quarry materials used in landfill operations qualify as “waste” under the levy framework. The court has now ruled that such materials do attract the levy, despite Cleanaway’s position that they should be treated as operational inputs rather than waste.
This classification carries significant financial weight for landfill operators. The distinction between materials classified as waste versus operational inputs directly determines the quantum of levies payable to state authorities.
Additional audit periods under EPA review
Beyond the FY18 period subject to today’s Supreme Court ruling, the EPA has conducted audits for FY19 and FY22 indicating further alleged underpayments relating to similar products. These amounts were not part of today’s Supreme Court proceedings.
The additional alleged underpayments are:
- FY19: $4.7 million
- FY22: $7.2 million
- Combined exposure across all three periods: $18.8 million (before costs and interest)
All figures are stated before costs and interest. The FY18 ruling may influence how these additional periods are ultimately resolved, given the precedent established regarding the classification of quarry materials as waste.
Potential total financial exposure
The combined alleged underpayment across the three audit periods totals $18.8 million before costs and interest, meaning actual exposure could be higher once these additional amounts are factored in. These relate specifically to Melbourne Regional Landfill operations.
The FY19 and FY22 amounts remain subject to separate processes and have not been determined by the court. Investors should monitor how Cleanaway addresses these additional periods in light of the FY18 ruling.
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Cleanaway reviewing appeal options
Cleanaway is reviewing the Supreme Court decision and has 42 days from the ruling date to lodge an appeal. Further detail regarding these proceedings is set out in Note 33 of Cleanaway’s FY25 Financial Report.
The announcement was authorised by the Chairman.
The appeal decision will determine whether this ruling becomes final or faces further legal challenge. Investors should watch for updates within the 42-day window regarding the company’s decision on whether to escalate the matter to a higher court.
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