“3(1)(a) the use of material to cover the disposal area during a short term cessation in landfill disposal activity; … (g) the use of material placed against the drainage layer or liner of the disposal area to prevent damage to that layer or liner;”
“15. … Disposal seems to me, in the context of these provisions, to connote the parting with or alienation of something. It is a term wider than discarding, since the statute contemplates that someone may dispose of something without discarding it leading to the conclusion that the material was not disposed of as waste. It is also a term wider than deposit, otherwise there is no reason why the statute does not use the word “deposit” throughout. Disposal will include, but not be confined to, any of the processes of removal, transport and deposit. It must include deposit because it is the deposit which triggers the tax and also identifies the time when the landfill site operator must be identified as such, but disposal is not limited to the process of deposit.”
“18 Since it appears that the Tribunal found that the deposit (and possibly the transport) were made on behalf of Darfish, it is argued that its intention was the only intention which the Tribunal was required to consider. I disagree. I have construed disposal as the antonym of retention. The focus of the provisions is upon the person getting rid of something, not upon the person retaining or acquiring something. DNS was not making a disposal, on my construction, on behalf of Darfish. It was assisting in the acquisition and retention of the material on behalf of Darfish. But it was making a disposal on behalf of Wilson Bowden and Hallamshire, and it is their intention which should have been determined by the Tribunal.”
“20. … The Act must, in my view, be construed against the background of its purpose. There is no dispute that one of the purposes of the Act was to promote recycling and to reduce the amount of waste going to landfill. To tax recycled material used for road making and the like at landfill sites would be contrary to that purpose. If that had been part of the scheme of the Act, then I would have expected there to be a clearer indication in the relevant sections.”
“33. In my view both the Tribunal and [counsel for HMRC] have failed to attribute its full effect to the decision of the Court of Appeal in Parkwood. In the light of that decision it is clear that if a disposal is to be a taxable disposal then the material must be being disposed of "as waste" at the time of its deposit at the landfill site. As we have seen, whether that condition is satisfied depends upon whose is the governing intention and what that intention is. In Parkwood the governing intention was held to be not that of the original waste producer, but of someone else ("the disposer at the site") who did not intend to dispose of the material "as waste". This was because the material had been recycled (sorted, mixed and/or crushed) and was no longer being disposed of "as waste". Aldous LJ treated recycling and discarding as mutually exclusive (see paragraph 30, last sentence). However I do not consider that the Court of Appeal were intending to limit the concept of recycling in the way the Tribunal and [counsel for HMRC] have stated. In the hypothetical example discussed at paragraphs 29 and 30 of the judgment of Aldous LJ the material was not even stated to have been subject to separation or sorting, yet it was regarded by the Court as being "recycled" rather than discarded because it was sold to the landfill site for roadmaking.”
“38. It is no answer to the above to point to sub-section 64(2). The effect of this provision is simply that if a person would otherwise be considered to be disposing of material "as waste" because he or she is discarding it, the potential usefulness of the material to the disposer or to someone else cannot be taken as affecting that finding. It does not deal with the separate question of whether the fact of recycling (or indeed any other aspect of the evidence) shows that there is no intention to discard.”
“41. I do not think that this is correct. If it were then in Parkwood the Court of Appeal would not have needed to consider the circumstances in which the waste material came to be recycled prior to being brought to the landfill site for engineering purposes. It would have been sufficient just to look at the use made of the material at the site. I do not consider that it is right to exclude the possibility that material can be re-used at the landfill site yet still be disposed of there "as waste", nor (which amounts to much the same thing) that without looking at all the surrounding circumstances one can exclude the possibility that, notwithstanding engineering use at the site, the governing intention is of someone who is not the landfill site operator and who intends to discard.”
“50. In my view the Tribunal erred in law in holding that the economic circumstances of a transaction represent an impermissible consideration by virtue of section 64(2). No factors which serve to indicate as a matter of fact whether material is being discarded by the person concerned should be excluded from consideration unless such an interpretation of the provision is unavoidable. As I have already said, the effect of section 64(2) is that if the material is in fact being discarded a mere potential for usefulness is not to be taken as changing the position. However it is not the inherent usefulness of the material which is being put forward by WRG as relevant to an intention to discard, but the behaviour of the parties to the transaction as reflected in the financial consequences thereof. The latter are not, in my view, excluded from consideration by section 64(2).”
“29. Whether or not there is a liability to landfill tax in respect of the materials to which this appeal relates depends on the proper interpretation and application of the provisions ofPart III of Finance Act 1996 . We are bound by the decision of this court in Parkwood in respect of the aspects of interpretation with which it dealt. But we are not concerned with the applicability to the facts of this case of the judgment of this court in Parkwoodor of Moses J in Darfish. In my view the decisions of both the Tribunal and Barling J are open to the criticism that too much time was taken up with the application of those judgments to the 11 categories which I have mentioned and not enough to the application of the legislation to the facts of this case.”
“… might be thought to draw a distinction between the material deposited as waste and the earth or other inert material with which it was covered so as to exclude the latter from being deposited by way of landfill. If that is so then why should material used for daily cover be regarded as disposed of by way of landfill, particularly if so used more than once? Material used in road building might be regarded as more obviously not disposed of by way of landfill notwithstanding that it is necessarily deposited on the surface of the landfill site.”
“33. … The word 'discard' appears to me to be used in its ordinary meaning of 'cast aside', 'reject' or 'abandon' and does not comprehend the retention and use of the material for the purposes of the owner of it. I agree with counsel for WRG that s.64(2) does not apply in such circumstances because there is, at the relevant time, either no disposal or no disposal with the intention of discarding the material. 34. It follows from this conclusion that the relevant intention may well not be that of the original producer of the materials. There is no principle that material once labelled as 'waste' is always 'waste' just because the original producer of it threw it away. That is not the relevant time at which the satisfaction of the conditions imposed by s.40(2) is to be considered. Recycling may indicate a change in the relevant intention but is not an essential prerequisite; re-use by the owner of the material for the time being may do likewise. Thus although the passing of title is not conclusive, it is, in my view, of greater relevance than Moses J, the Tribunal or Barling J were prepared to attribute to it. 35. It may be that the economic circumstances surrounding the acquisition of the materials in question by the ultimate disposer of them will cast light on his intention at the relevant time. They cannot, as I see it, affect the decision on this appeal because the use of the relevant materials by WRG is clear and such use is conclusive of its intention at the relevant time by whatever means and on whatever terms WRG acquired them.”
“45. In my judgment, the concept of intending to use something, as the antithesis of intending to cast it aside or abandon it, involves some action to harness the properties of an item and direct them towards a purpose of the user. If a gardener sets up a water butt to collect rainwater from the roof and guttering, she then uses that rainwater to water the plants if during the summer she transfers the water into a watering can and waters the garden. But one would not normally say that the gardener ‘uses’ the rain to water the garden during the winter when all that happens is the rain falls onto the garden and soaks the plants. She certainly benefits from the natural falling of the rain but she is not ‘using’ the rain in the ordinary sense of that word. In the present case, there is no ‘use’ of the biomass to produce landfill gas by Patersons because all that happens is that the biomass decomposes in the normal course and generates the gas. This would happen whether Patersons used the methane to make electricity or disposed of the gas by flaring. The fact that it may ‘use’ the methane does not mean that it uses the biomass since the methane is not what is tipped into the void and either discarded or not. It is the biomass that is disposed of by way of landfill, not the methane.”
“72. Although the question is certainly not without difficulty, I would, on balance, conclude that Patersons cannot be said to use the material, the biomass, by virtue of harvesting methane produced in the course of its decomposition. As I see it, Patersons was intending to get rid of the material by way of landfill and the methane came naturally, and inevitably, as a later by-product of that activity. To revert to the seed example, they were not planting the seed but dumping it.
“[WRG] does not in our view establish (or even support) the proposition … that “use” is the antonym of “discard”; it merely emphasises that “retention and use” of material in the manner under consideration in WRG does not amount to “discarding” the material.”
“118. … It is known that in general the overall body of waste to be placed in a cell will almost inevitably contain items which offer a threat of damage to the liner or capping system. In order to minimise the risk of such damage, the overall process of disposal into a cell is required to be managed so that such items are placed a safe distance from the vulnerable liner and cap. In practice, operators have found that an effective means of achieving this is to deposit domestic (or sometimes commercial, and occasionally other) waste streams as the first and last layers of waste; such streams are, in effect, pre-sorted by reason of their source so that they almost never contain items which represent a risk to the liner or cap and any residual risk is (hopefully) eliminated by the visual inspection to which they are subjected as they are laid. Going back to the domestic bin analogy, it is as if the householder appreciates that he or she may well be putting sharp objects into the bin which could cut the bin liner, and is therefore careful to ensure that when filling the bin he or she first places items in it which offer no risk of cutting the liner and afford a degree of “padding” to prevent any sharp objects later disposed of from doing so. 119 Mr Grodzinski pointed to the fact that site operators, unlike householders, plan their tipping operations around the use of the relevant material as “fluff”, so that an intention to deposit it for that purpose is formed, in reasonably specific terms, well in advance of its actual arrival on site; this, in his submission, reinforced the argument that the appellants had formed an intention to “use” as opposed to “discard” the material. Whatever semantic arguments there may be around what is actually meant by “use” of the material, we do not consider “use” to be the antonym of “discard” as the appellants submitted, for the reasons set out above, and therefore we consider this submission to be based on a false premise. “Use” is an indicator to be taken into account, but no more than that. The statutory question remains: when the appellants made the disposals in question, did they do so with the intention of discarding the material disposed of? In our view, the answer to this question is that they did, and the fact that the material continued to serve a useful function after such disposal does not affect this conclusion. They were simply disposing of the material carefully, as the regulatory regime required them to.”
“66. The only relevant question is whether, at the time of disposing of the material by way of landfill at a landfill site, the operator intended to discard it. In our view, WRG decides, as a matter of principle, that if a site operator disposes of material at a landfill site, but in doing so intends to and does make use of its properties for his own purposes, including compliance with regulations, licenses, permits or any other requirements for the site, that use means that the operator does not make the disposal with the intention of discarding the material. That is so regardless of whether the material is recycled or sorted before being deposited on the landfill site, and even though the disposal is acknowledged to be “by way of landfill” within the meaning of s 65(1) of FA 1996. “67. We reject the Commissioners’ arguments that the Court of Appeal in WRG decided only that what amounted to use would vary from case to case. Although the Chancellor did not define “use” – because it is not a word found in any relevant statutory provision – he did decide what “discard” meant. He said that its meaning did not comprehend retention and use. The effect of that decision is that use of the properties of materials for the operator’s own purposes will not be a disposal with the intention of discarding them, and so not a disposal of the materials “as waste”.”
“75. Applying the ratio of WRG to the facts of this case, the clear conclusion is that the taxpayer companies, when disposing of fluff at their landfill sites, intended to and did make use of the properties of the fluff for their own purposes, namely providing a layer of protection for the geomembrane and drainage layer in the cell and the cap of the cell, thereby complying with the regulatory requirements for use of the landfill cell. The careful inspection of the fluff layer (to ensure that no sharp or large objects were contained in the bags) and the different compaction used on the fluff emphasise that the fluff is being used by the taxpayer companies in a particular way, in contradistinction to other black bags that are disposed of as waste. The fact that the black bags were not recycled and only sorted to a limited extent at the time of emplacement makes no difference in principle. As in the WRG case, the use that is made of the fluff is clear and compels the conclusion that the taxpayer companies did not intend to discard it. There is no distinction in this respect between base or side fluff and top fluff.”
“The word ‘discard’ appears to me to be used in its ordinary meaning of ‘cast aside’, ‘reject’ or ‘abandon’.”
“Few words have exact synonyms. The overtones are almost always different.”
“It has to be that which is disposed of, discarded, got rid of, not needed any more by the person who is in the process of discarding it or disposing of it. It is to be of no further use to that person who has possibly produced it but is certainly discarding the material.”