Following the decision in Linc Energy (in Liq) [2017] QSC 53, the liquidators of Linc Energy will be required to ensure the company complies with an environmental protection order (EPO) relating to its underground coal gasification project in Chinchilla. This is despite the liquidators having given notice disclaiming the underlying land, resource authorities and environmental authorities.
The decision largely centred on a constitutional issue with Jackson J finding that there is a direct inconsistency between the disclaimer provisions of the Corporations Act 2001 (Cth) (CA), which have the effect of terminating a company’s liabilities in respect of disclaimer property, and the provisions of the Environmental Protection Act 1994 (Qld) (EPA) relating to EPOs.
Ordinarily, the Commonwealth legislation would prevail by reason of s 109 of The Constitution. However, his Honour found that s 5G of the CA, together with an often overlooked provision of the Corporations Ancillary Provisions Act 2001 (Qld), effectively wound back the operation of the Commonwealth disclaimer provisions to the extent of any inconsistency.
His Honour also found that the liquidators are “executive officers” of the company under s 493 of the Environmental Protection Act, which means they will be personally liable to ensure compliance with the EPO.
Although the decision turned largely on its own facts, namely the terms of the EPO and relevant disclaimer property, it is now clear that disclaimer will not necessarily allow resource companies to avoid environmental obligations following liquidation.
Hemmant’s List’s Jennifer Hewson appeared for the Attorney-General (Qld), intervening. See the judgment here: http://archive.sclqld.org.au/qjudgment/2017/QSC17-053.pdf
