Cleansing Service Group Limited, R (On the Application Of) v Environment Agency

The S3 exemption in the Environmental Permitting (England and Wales) Regulations 2016 covers storage of residual septic-tank sludge ready for agricultural use under the Sludge (Use in Agriculture) Regulations 1989. It does not cover sludge mixed with debris or screening which removes debris before storage. Screening is treatment, even if it is also a recovery operation. The linked requirements in Schedule 2 are conjunctive and do not enlarge the exemption. Any de minimis question is fact-specific and cannot make general guidance unlawful. The application for judicial review was dismissed.

Cleansing Service Group Limited challenged Environment Agency guidance stating that the S3 exemption authorised storage of septic-tank sludge but not screening debris before storage. The claimant collected sludge, screened debris through a grid at farm storage sites and placed the debris in a skip.

Permission for judicial review was refused by Jeremy Baker J and, on renewal, by Dove J, who also considered the substantive argument unarguable. Underhill LJ granted permission and directed that the matter proceed in the Court of Appeal. The Agency accepted that the guidance was reviewable but argued that the claim was out of time. The central issue was whether the material remained residual sludge and whether screening formed part of the S3 exemption.

Disposition. The Court of Appeal dismissed the application for judicial review. Baker LJ gave the judgment, with Sharp and Rafferty LJJ agreeing.

1. Under the Directive 86/278/EEC and the Sludge (Use in Agriculture) Regulations 1989, residual sludge from septic tanks means sludge ready for use by spreading on or applying it to soil. It does not mean sludge including debris. The material covered by S3 must therefore be treated and fit for use before it is stored.
2. The word storage in S3 means storage. It does not include treatment. Screening debris from sludge is unquestionably treatment and falls outside the exemption.
3. The fact that screening may be a recovery operation under the Directive 2008/98/EC did not assist the claimant. Recovery is a form of treatment. Although Article 24 permits exemptions from permit requirements for recovery operations, that discretion remains subject to Article 13 and does not enlarge the domestic S3 exemption.
4. The claimant’s argument based on the absence of permits for septic-tank owners or ultimate users was rejected. The sludge collected from septic tanks differs from residual sludge fit for agricultural use, so regulation of the collecting operator was not illogical.
5. Paragraph 4(1)(a), (b) and (c) of Schedule 2 to the Environmental Permitting (England and Wales) Regulations 2016 is conjunctive. An operation must satisfy each requirement, including consistency with Article 13 of the Waste Framework Directive. The court rejected reading substantially into regulation 5(b).
6. Whether a de minimis principle applies could only be determined on the facts of a particular prosecution. Even if such a principle were available, the Agency had not erred in law by advising generally that screening was treatment outside S3. The proposed regulatory arrangements were not disproportionate.

The procedural objection concerning the time limit under CPR rule 54.5(1) did not require determination because permission had already been granted.

• High Court of Justice, Queen’s Bench Division, Administrative Court. Jeremy Baker J refused permission on the papers. Dove J refused permission on renewal, finding the substantive challenge unarguable, although he considered the procedural issue arguable.
• Court of Appeal (Civil Division). Underhill LJ granted permission and directed that the claim proceed in this court. The court dismissed the application for judicial review in [2019] EWCA Civ 157.