Attorney-General for the State of Queensland; Chief Executive, Department of Environment and Heritage Protection v Longley, Sparks and Ford as Liquidators of Linc Energy Limited (In Liquidation) & Anor

[2018] HCATrans 185

[2018] HCATrans 185

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Brisbane  No B10 of 2018

B e t w e e n -

ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND

Applicant

and

STEPHEN GRAHAM LONGLEY, GRANT DENE SPARKS AND MARTIN FRANCIS FORD AS LIQUIDATORS OF LINC ENERGY LIMITED (IN LIQUIDATION) ACN 076 157 045

First Respondent

CHIEF EXECUTIVE, DEPARTMENT OF ENVIRONMENT AND HERITAGE PROTECTION

Second Respondent

Office of the Registry
  Brisbane  No B11 of 2018

B e t w e e n -

CHIEF EXECUTIVE, DEPARTMENT OF ENVIRONMENT AND HERITAGE PROTECTION

Applicant

and

STEPHEN GRAHAM LONGLEY, GRANT DENE SPARKS AND MARTIN FRANCIS FORD AS LIQUIDATORS OF LINC ENERGY LIMITED (IN LIQUIDATION) ACN 076 157 045

First Respondent

ATTORNEY-GENERAL FOR THE STATE OF QUEENSLAND

Second Respondent

Office of the Registry
  Brisbane  No B12 of 2018

B e t w e e n -

CHIEF EXECUTIVE, DEPARTMENT OF ENVIRONMENT AND HERITAGE PROTECTION

Applicant

and

STEPHEN GRAHAM LONGLEY, GRANT DENE SPARKS AND MARTIN FRANCIS FORD AS LIQUIDATORS OF LINC ENERGY LIMITED (IN LIQUIDATION) ACN 076 157 045

Respondent

Applications for special leave to appeal

GAGELER J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON FRIDAY, 14 SEPTEMBER 2018, AT 9.31 AM

Copyright in the High Court of Australia

____________________

MR P.J. DUNNING, QC, Solicitor‑General of the State of Queensland:   May it please the Court, I appear with my learned friends, MS F.J. NAGORCKA and MS J.M.N. HEWSON, for the Attorney‑General, the applicant in B10, and a respondent in B11.  (instructed by Crown Solicitor – Brisbane)

MR B.D. O’DONNELL, QC:   May it please the Court, I appear with my learned friend, MS E. HOIBERG, for the applicant, Chief Executive, in B11 and B12; and the second respondent in B10.  (instructed by Herbert Smith Freehills)

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR C.A. WILKINS, for the liquidators, first respondents in each application.  (instructed by Johnson Winter & Slattery)

GAGELER J:   Mr Dunning.

MR DUNNING: Thank you, your Honours. Your Honours, there are four central issues that, in our respectful submission, warrant a grant of special leave. The first of those is the operation of section 5G(11) of the Corporations Act. That issue includes the issue of whether sections 568 and 568D of the Corporations Act operate in if I might describe it, the “all or nothing” manner that the Court of Appeal held that they did because ultimately that question turns on the operation of 5G(11) on those provisions and, indeed, all provisions of the Corporations Act.  That issue picks up the related issue of whether, if 5G(11) were not the appropriate provision, would 5G(8) be the appropriate provision?

GAGELER J:   That is a much more ambitious argument, I think.

MR DUNNING:   Yes, and we will get provenance that reflects that.  Your Honours, in relation to 5G(11) and, indeed, that suite of provisions, it concerns provisions that came in in 1990 as a result of referral of State powers.  They have been rarely litigated.  The only case, apart from the present litigation, of any particular significance is Justice Barrett’s first instance decision in HIH and whilst they came to this Court in Bell Resources, because of the manner in which that litigation proceeded, it was unnecessary to consider these provisions.  They are important provisions of national application.  They have never had the occasion to be considered by this Court.  This application would provide a vehicle for doing that.

The second of the central issues, your Honours, is the correctness of Justice Barrett’s reasons for judgment in HIH insomuch as what does the expression “in a State” mean in 5G(11).  Your Honours will be aware that that same form of language appears in 5F(2) and (4) and really for the same reason that I have just mentioned that remains an important issue that warrants the consideration of this Court to guide persons involved in the operations of the Corporations Law throughout Australia.

The third of those issues is the place of contentions as to the proper construction of a statute on a given set of facts as, to use Justice McMurdo’s assessment of admissions and the ability to admit the operation of a statute, if the majority in the Court of Appeal – and we will come to the fact that Justice Bond was careful not to adopt such an approach – were right, it would, in our submission, bring about a significant alteration in how courts deal with parties’ submissions as to the proper operation of a statute if they are taken to, in effect, make admissions in doing so.

Finally, there is the proper meaning of the expression “in respect of” in section 568 of the Corporations Act.  It is a provision in daily operation throughout Australia by liquidators and other insolvency - or liquidators, and guidance as to what it means in respect of statutory obligations such as an environmental protection order is raised by these proceedings.

Turning then to why this is an appropriate occasion for a grant of special leave in respect of each of those matters, firstly, we note the respondent liquidators do not assert that the issues raised on the application are not matters of public importance or general application of the kind contemplated by section 35AA of the Judiciary Act and in light of the matters I have just outlined in our submissions they are right to do so.  We of course do not suggest they are taken to admit anything by doing so.

KEANE J: Mr Solicitor, do we get to any of the issues that you have mentioned if section 319 of the Environmental Protection Act 1994 does not have a remediatory operation?

MR DUNNING:   If that were the proper construction of it, no, you would not get to it because it simply would not be engaged but that is not, as we understand it, a basis on which the case has been decided at any stage below, nor is it effectively asserted against us and it would, if we can complete that, lead to a somewhat perverse – indeed, I do not want to be too florid – but bizarre result because it would mean that 319 and the general environmental duty would be alive only to deal with persons who are thinking about creating environmental harm or were caught in the act of doing it.

KEANE J:   Or just carrying on activity that is apt to.

MR DUNNING:   Correct.  But it would not pick up ‑ ‑ ‑

KEANE J: So that if they are not actually carrying on an activity that is apt to have that result, section 319 does not speak to them, which is not at all absurd.

MR DUNNING:   Well, except it gives it a more limited operation than the provision calls for, in our submission.

KEANE J:   Well, no, the section says, “A person must not carry out any activity”, so that if they are not carrying out an activity the Act is not speaking to them.

MR DUNNING:   Well, that assumes though that it is frozen at a point in time, that is, that it can only be an activity that is presently being carried on or will be carried on in the future and ignores activity that has been carried on in the past.  So it is really the submission I was meaning to make as to the improbability that it would be construed in that way.

GAGELER J: It is not clear to me whether or not it was construed that way in the Court of Appeal. There perhaps are indications to the effect that section 319 simply ceased to apply as a matter of State law on the disclaimer of the property because it simply could not operate any more, and there are other indications in the judgment to the effect that it was section 568D that removed the liability.

MR DUNNING:   That is correct.

GAGELER J:   You would have us read it in the latter way, I suppose?

MR DUNNING: Yes, and more particularly, nobody – when I say nobody, neither of the courts below has held that section 319 did not have an operation that would have engaged it in the present case. That must be so because in each case the courts below found there was an inconsistency between State and federal law and if it was not engaged in the way that Justice Keane raised with me, well, then there would not have been that inconsistency because there would not have been a power to issue the EPO.

It might have failed for another reason, but it would not have failed for the reasons that the litigation is concerned with.  Do you want me to develop that submission any further, your Honour, because that is really our answer to it, is to say that ‑ ‑ ‑

KEANE J:   No, that is fine, thank you.

MR DUNNING:   Your Honours, that then really leaves two matters for consideration as to whether this is not a suitable vehicle for special leave and our friends say there are two things there.  One is insufficient prospects.  The second is in respect of HIH grounds, an unsuitable vehicle.  If there are adequate prospects on earlier grounds, then the HIH ground is engaged, so we can ignore the unsuitable vehicle argument, in our submission, because provided we can demonstrate there are prospects of success that would warrant a grant of leave, then the unsuitable vehicle point will go away.  So that is really the matter we would wish to address.

Before I descend to some particular matters in relation to why there are sufficient prospects, the following matters of themselves demonstrate that this is a matter with serious prospects that warrant the attention of the Court.  First of all, there is the decision of Justice Jackson at first instance.  His Honour considered these arguments and in a reasoned decision found in our favour in respect of each of the matters that we would wish to agitate on appeal in this Court other than the “in respect of” point because it, on his view of it, did not arise.  That, in our respectful submission, is alone sufficient to demonstrate sufficient prospects.

Secondly, in relation to the HIH point, in addition to his Honour’s reasons, there is the fact that the Court of Appeal recognised that there was force in the contrary argument put forward by the State and the Department.  Your Honours will see that in Justice McMurdo’s reasons at paragraph [124], page 94 of the application book – sorry, page 87, my apologies, your Honours, page 87 of the application book at about lines 2 to 3 and onwards.  His Honour recognises that “in a State” is capable of more than one meaning and that there was force in the submissions of a State.

Finally, in that regard we would note, as we have set out in our reply at paragraph 6 on page 181 of the application book, when this issue was agitated in Bell Resources each of the Attorneys for the Commonwealth, New South Wales, South Australia, Tasmania and Queensland made submissions, consistent with the submissions we make about the expression “in respect of” and ultimately, with respect, the incorrectness of Justice Barrett’s reasoning in HIH.  It would appear to be a case on the face of it with good prospects, but for present purposes, more than sufficient prospects.

Finally, your Honours, in relation to the admission point, that is, that by your contention as to how a statute is to be properly construed you might make an admission in a case, we would also call in aid - Justice Jackson rejected that at first instance - we would also call in aid Justice Bond’s reasoning at paragraph [166], page 94 of the reasons.

Your Honours will note that Justice Bond not only declined to follow the reasoning of Justice McMurdo in that regard, but was also careful not to use the expression “admissions” and his Honour recognises that whether the statutory regime operates as a matter of law one way or another, it is just not something the parties are in a position to admit to, much less in reality bind the rest of the community to, which is where the Court of Appeal would leave us, if that were the case.  Can I then descend to just a little detail in relation to ‑ ‑ ‑

KEANE J:   They can make a concession, though, that takes the construction of a particular provision out of play as an issue in the hearing.

MR DUNNING:   Undoubtedly right.  They can make a concession about that, but that is not the basis on which Justice McMurdo, with whom Justice Gotterson agreed, sought to use the admissions, to use his Honour’s language.  It was not that my side had said ignore that.  It does not arise here.  The complaint was we said upon its proper construction it operates this way so you can have this partial disclaimer, therefore we accept the disclaimer of the land was a good disclaimer, but it just did not matter.  But we would agree with the matter that your Honour puts to us.  Can I then move to just briefly a couple of additional matters in relation to 5G(11) and the “all or nothing” theorem of the Court of Appeal?

GAGELER J:   What was the “all or nothing” theorem?  Was it 568 plus 568D as a package?  Was that the all, or what?

MR DUNNING:   As far as we can tell from the reasons – and I take your Honours to the reasons and as far as we can deduce – and we do not mean to say it pejoratively naturally but, in our respectful submission, the Court of Appeal assumed the very thing they were called to decide in this regard and, worse, approached it from an inverted position.  Can I take your Honours briefly to the statutory provisions?  If I can ask your Honours please to go to page 113 in the application book, your Honours will see at about line 20, 5G(1) provides that:

This section has effect despite anything else in the Corporations legislation.

So there is a paramountcy provision. Section 5G(3) talks of the interaction between State and federal laws and it is accepted that this was a case that engaged 5G(3). Then if we go to 5G(11) on page 118 at about line 20:

A provision of the Corporations legislation does not operate in a State or Territory to the extent necessary to ensure that no inconsistency arises between –

the State and federal law.  Then if we go to 568 and 568D - your Honours will find that on page 129 - your Honours will see on 129 at about line 35, the liquidator may at any time disclaim property that consists of (a) burdened land or (d) “property that may give rise to a liability to pay”.  Then on page 131 at about line 25, 568D, the effect is to terminate from the date of the disclaimer the company’s, amongst other things, liabilities, and critically “in respect of the disclaimer property”.

When one goes to the majority’s reasons – sorry, the Court of Appeal’s reasons in this regard, can I first of all ask your Honours please to go to paragraph [63] of Justice McMurdo’s reasons on page 71 of the application book.  Your Honours will see at about line 25 in the last sentence:

The necessary preconditions to the application of s 5G being satisfied, the question then was whether any of the ss 5G(5) to 5G(11) applied to the present case.

If we can then take your Honours please to [59] on the previous page at about line 15, his Honour is speaking of the operation of 319 and 358 of the Environmental Protection Act and 568 and 568D.  At about line 15:

This is an apparent direct inconsistency between the State law and the Commonwealth law which, subject to what might be the effect of ss 5G(8) and 5G(11) of the CA, would be resolved in favour of the Commonwealth law by s 109 of the Constitution.

Then at paragraph [79] on page 76 of the reasons his Honour confirms at about line 25 that there is no issue about the inconsistency of the provisions between the Corporations – the existence of the inconsistency. That leads his Honour to reason as he does at paragraphs [113] to [114] which your Honours will find on page 84 of the application book and your Honours will see just above line 30 at the beginning of [113]:

Section 5G operates where there would be a direct inconsistency –

His Honour then canvasses some aspects in that regard, and then critically at about line 35:

However s 5G(11) should not be construed and applied to produce an operation of the CA which the Commonwealth Parliament could not have intended. It could not have been intended that by a disclaimer of property, a liquidator could cause a company to lose all of its rights and interests in or in respect of the property, but remain burdened by a liability in respect of it. That would be an absurd operation of a law which has a long recognised purpose of enabling the company to rid itself of burdensome obligations.

GAGELER J:   Why would it be absurd?  Does his Honour explain that?

MR DUNNING:   No, not explain it because there is a line‑drawing exercise in any of these matters.  But not only does his Honour not explain why it would be absurd; implicit and essential to that line of reasoning is that one construes 5G(11) by reference to what 568 and 568D provide for and how they would and would not operate.  In our submission, that is to invert the orthodox approach to construing such provisions.  It is to ignore the primacy that 5G(1) gave 5G(11). 

No explanation is given, for example, as to why out of a thousand‑odd sections in the Corporations Law we would choose 568 and 568D to construe the operation of 5G(11). Instead what ought to have happened was his Honour should have, in our respectful submission, said, well, here is 568 and 568D. Section 5G(11) provides as it does. Section 5G(1) tells me that they will take precedence over 568 and 568D and when I go to the statutory language of 5G(11) it instructs me that where there is a provision of the Corporations Law that is inconsistent “to the extent necessary” is to be construed to ensure no inconsistency arises.

GAGELER J: So you are putting it that the provision relevantly being referred to in subsection (11) is section 568D?

MR DUNNING:   Yes.

GAGELER J:   Thank you.  I can see your light is on.

MR DUNNING:   Yes, thank you, your Honours.

GAGELER J:   Thank you.  Mr O’Donnell, do you have anything to add?

MR O’DONNELL: Can I just say a word about the 5G - about the question of resolving the inconsistency between 568D and section 5G(11) that his Honour Justice McMurdo addressed, particularly at pages 86 and 87. So this assumes that 568D does allow partial rollback, so it assumes we get over that hurdle, and his Honour is addressing this as an alternative. The key passage of the reasoning is in paragraph [127] starting on page 87.

GAGELER J:   This is the HIH point?

MR O’DONNELL:   Yes, particularly the reasoning of his Honour.  His Honour’s reasoning at [127] seems to be:

confining the operation of ss 568 and 568D to property which is located in Queensland would not ensure that no inconsistency would arise between provisions of the CA, specifically ss 556(1) and 559, and the relevant provisions of the EPA.

In our submission, that is misapplying the test in 5G(11).  If your Honours turn to that section at page 118 it mentions “the provision of the Corporations legislation” twice, the opening words and in (a).  In our submission, it is the same provision that is intended.

GAGELER J:   Yes.

MR O’DONNELL:   In this case it is 568D.  So it reads 568D:

does not operate in a State . . . to the extent to ensure that no inconsistency arises between –

between 568D and the provision of the State EPA legislation.  But his Honour’s key reasoning is that if you confine 568D to property located in Queensland, that would not ensure that no inconsistency arises with another section of the Corporations Act, that is, the priorities provision.

GAGELER J:   You have addressed this, I think, very clearly in paragraph 35 of your written submissions at page 200.

MR O’DONNELL:  Yes, your Honour.  His Honour Justice McMurdo went on to talk about a disapplication of 556 in Queensland as a reason not to roll back 568D.  Your Honours will see this on page 87, paragraph [126], the last four lines:

Therefore, there would be a real potential ‑ ‑ ‑

GAGELER J:   Yes.

MR O’DONNELL:   His Honour also restated this at the previous page, paragraph [123] on the second line talking about:

the fundamental problem which was identified in HIH, namely the difficulty in disapplying the effect of the priorities provisions of the CA by having them disapplied in only one State -

But that was not the case that was run.  It was not argued before the Court of Appeal that 556 was disapplied, and we make that note in our outline of submissions, page 199, paragraph 33.  So, in our submission, his Honour has taken into account something which does not enter into the test under 5G(11) and has assumed ‑ ‑ ‑

GAGELER J:   And in your submission is not a necessary consequence of 5G(11) applying to 568D?

MR O’DONNELL: That is right. The only consequence of applying to 568D is to roll back the operation of 568D so that the obligation under the State law would stand unaffected. There is one other thing I wanted to mention while I am on my feet. Your Honour Justice Keane raised a question about if section 319 had no remediatory operation.

That was touched upon by Justice Jackson at first instance.  Can I take your Honours to page 18?  His Honour mentioned this at paragraphs 64 and 65.  His Honour notes the liquidator did not submit that the EPO was invalid for that reason.  Nor, as we followed it, was that submission made to the Court of Appeal.  So that has not arisen in the litigation to date.  Otherwise, we rest on our written submissions.

GAGELER J:   Yes, thank you.  Mr Walker.

MR WALKER:   May it please the Court.  Your Honours, may I go to that last point first, picking up the way Justice McMurdo addresses the matter in application book page 83, paragraph [106].  It is not confined to the theoretical question whether the EPO was invalid as lacking an available foundation enforcing compliance with the general environmental duty.  It had to do with the fact that there would be, could be, no further activity.

That is one of the reasons why this is no mere admission or concession as to an operation of law.  This is a position which was taken in and out of court, as we have drawn to attention in our written response.  Out of court the State has taken the position that the disclaimer has operated so as to make the land available for the State and certainly, facts on the ground, to use the cliché, involved there being no activity to which the general environmental duty could attach. 

It is of course common ground that the disclaimer was prospective only, so as to the past and liabilities accruing in the past, nothing to be seen here in this case – this case does not raise any issue about that.  The issue that is sought to be raised is therefore about a supposed conflict in relation to State laws that require there to be an activity in relation to which the duty is engaged. 

For the reasons Justice McMurdo expresses, agreed in by the court, at paragraph [106], once the disclaimer embraced to this effect and to that extent still by the State, once that has been disclaimed there was no activity which could be carried out to which the general environmental duty could attach and for which the EPO could have operated in pursuit of its stated purpose which involves, I suppose, the notion of remediation.

It is for those reasons, as Justice McMurdo, before the court here – that is, agreed in by Justices Gotterson and Bond – held that the undoubtedly interesting and important matters of 5G simply are not reached.  It is not a matter of being an inappropriate vehicle so much; they are not reached because, there being a disclaimer, the only question was whether it carried with it the consequences spelled out in 568D.  That having been determined as was determined in the Court of Appeal, namely a disclaimer, does achieve its defining and justifying characteristic of removing a liability.

GAGELER J: Mr Walker, the difficulty I have with this submission is if you are right as to the operation of section 319 you do not get to 568D.

MR WALKER:   No, you do not need a disclaimer as soon as it can be seen that there is no further activity.  But it happened to be because of the disclaimer ‑ ‑ ‑

GAGELER J:   Of course; I understand.

MR WALKER:   ‑ ‑ ‑ effected by us and accepted by the State that we can say definitively it happens to be – in this case the narrative has the 568 disclaimer operating so that there would be no activities to which 319 could apply.  Your Honour is quite right.  I am not talking about a legal interaction between 319 and 568D.  I am saying that as a matter of fact the acceptance by the State of the disclaimer of the property meant that there was no activity, to which a liability about which a 568D question might arise could occur and that means that you really do not reach 568D but you certainly do not reach 5G.

GAGELER J:   Yet the Court of Appeal did reach 568D.  It started off by saying it was dealing with 568D.  Immediately after the paragraphs you have taken us to it goes to 568D ‑ ‑ ‑

MR WALKER:   My explanation of that is, as I have just attempted, namely, that was the narrative.  Between the parties it was accepted there had been a 568 disclaimer.  It was argued on that basis.  The question was:  what was the consequence of it?  In the course of argument on that, we put, the court accepts that there being no activity there cannot be a liability arising from the carrying out of an activity in a particular way. 

It has been expressed as being involved in or caught up by the operation of 568D.  That is unnecessary or surplusage but not wrong.  It would only be wrong if it was said that was an essential aspect of the argument.  I do not think their Honours have said that, with respect.  They are correctly recording the narrative that the parties jointly presented.

GAGELER J:   On your submission, there is no liability ‑ ‑ ‑

MR WALKER:   That is right.

GAGELER J:   ‑ ‑ ‑ to which 568D attaches.

MR WALKER:   Exactly.  Then there is a cascade of fallback arguments and your Honours are familiar with the fact that, I think, they cover all of them and the three judges below differ on just one of those – the adjectival argument, highly peculiar to this particular litigation with the so‑called admission or concession.  But otherwise in all of the cascading arguments the judges below have reached the same conclusion.

The fact that they are fallback arguments only highlights for the purposes of special leave that this Court should, with respect, be intent to ensure that the interesting and important matter of 5G – I mean it is politically interesting and important, but it happens, like all such political compacts, to have produced a legislated articulation which notoriously has difficulties.  The paucity of the case law, to which the learned Solicitor‑General refers, is not something I can rely upon.  This is a problem.  But this is a very bad case to take up in order to address the problem.

Now, I can say, without in any way being facetious, if it is so important a point, and your Honours should take it I submit it is, it is bound to occur again, bound to, and this Court should not – Bell is a good example of this – this Court should not take it up to look at it unless this Court can be quite satisfied it will be reached.  The robustness, the sturdiness, the simplicity of the argument by which it is simply not reached is such that in this case you could not be so confident and that is why, an important point, should not get special leave.

GAGELER J: Going back to that threshold point, what disclaimer of what property prevented section 319 from applying? Was it the disclaimer of the land ‑ ‑ ‑

MR WALKER:   And the MDL.

GAGELER J:   And the MDL.

MR WALKER:   Yes.  Or, to put it more accurately, I do not think there has ever been an attempt severally to differentiate between the land and the MDL, no doubt because in sensible commercial terms the one is not valuable without the other.  They are a bundle of rights with particular commercial promise and particular regulatory burden.  So I think there was no different intention attempted.  As your Honours appreciate, there was another mining tenure that had fallen away by effluxion of time.

That is why, in our submission, the Court of Appeal was plainly correct in simply noting what happened as a result of the dealing by the liquidator, accepted, embraced, taken advantage of out of court by the State, the so‑called disclaimer, and it is for those reasons, in our submission, that we simply will not reach the conflicting laws point.

Now, as a respondent to an application for special leave, if I start following the cascade then I am afraid of course I am forced to concede that however much I urge the good sense, if I may say so, with great respect, of Justice Barrett’s attempted solution to just one of the puzzles that 5G presents, I think it would be submitting in vain that that is not worthy of a grant of special leave. 

That is why we do say that it is a point not raised in this case which will undoubtedly occur.  How often - who knows because the fact is there are not all that many cases of serious conflict, but it may well be that environmental legislation with what I call long‑tailed remediation

obligations sounded in money may be exactly the kind of interference with an orderly and brisk liquidation of an insolvent entity that will give rise to this problem.  This case simply does not do so because the State has been so astute to grasp the opportunity presented by the disclaimer.

It is for those reasons, in our submission, that this is not a case of an unmeritorious cleaving to an admission or concession of the kind that Justice Bond expressed misgivings about in his one‑element disagreement.  This is quite a different proposition.  Special leave, after all, is being sought for an appeal from the decision of the Court of Appeal and insofar as that decision embraced the disclaimer as itself a position urged by the State, then the question arises what possible error was there in the Court of Appeal by majority holding the State to that position with all the consequences it then entailed. 

So there is really, in our submission, no showing of an error by the Court of Appeal in carefully analysing the case management, the assembly of rival contentions, the advancement of argument which showed that the State embraced and relied upon the disclaimer – that is what his Honour calls a premise‑ but failed because they did not deal with all that that premise entailed as a consequence.

GAGELER J:   What did the premise entail – that he had to take 568D or 568 as a package?

MR WALKER:   There are two.  The first is no further activity – end of the possible operation of the environmental laws.  That is the primary position.  The second, which I think is the first of the cascading arguments, if that did not suffice then one said 568 goes with 568D.

GAGELER J:   Yes.

MR WALKER:   Your Honours, I would be repeating myself.  May it please the Court.

GAGELER J:   Mr Dunning.

MR DUNNING:   Your Honours, just very briefly.  Our friends talk of it being the narrative, to use their expression, but ultimately when pressed by your Honour Justice Gageler it was said that it was the disclaimer of the land and the MDL that created the disclaimer of these obligations.

Now, what follows from that is the case did expressly engage the very point that we have contended for, that is that the Court of Appeal dealt with the case on the basis that there was a disclaimer and there was therefore an inconsistency between the Corporations Act and the obligations imposed by the Environmental Protection Act in Queensland.

GAGELER J: Mr Dunning, we have to be concerned with the way in which the appeal would run, if special leave were granted. A preliminary question would be raised in the appeal as to the operation of section 319 in circumstances where the disclaimer brought about a ceasing of activity on the land. Now, does section 319 continue to apply? It is not a matter of the validity of the order imposing the obligation but of the continuing operation of the order.

MR DUNNING:   In our submission, Justice Gageler, the answer to that question is not about the continued operation of 319; it is about the proper application of 358.  Can I take your Honours to the provisions?  I ask your Honours to go to page 14 of the book.  You will see the relevant provisions extracted in Justice Jackson’s reasons.  At paragraph 47, at about line 35, his Honour sets out 319.  Can I draw attention to these words in 319(1):

A person must not carry out any activity that causes, or is likely to cause, environmental harm unless all reasonable –

precaution is taken and that is described as a general environmental duty.  So the general environmental duty is, unsurprisingly, that in the moment or in terms of what you intend to do you may not conduct activities likely to cause harm.  Now, there is no doubt that the activities the subject of the EPO met that description – that is, there is no doubt the remediation that is sought is in respect of activities undertaken by Linc that were in the course of carrying them out likely to cause harm. The proper question is not about continued operation of 319.  The proper question is about the operation of 358.  That appears in paragraph 53 on page 15.  At about line 35:

“The administering authority may issue an order (an environmental protection order) to a person‑

and on the next page (d):

to secure compliance by the person with‑

(i)the general environmental duty –

So the proper question is, a person who has breached the environmental duty at some time in the past or somebody who is evincing an intention to breach in the future may be the subject of an EPO to secure compliance with that duty.  That is why, in our submission, there is nothing remarkable in the contention ‑ ‑ ‑

KEANE J:   So you read “secure” as not being to ensure but to take steps to restore?

MR DUNNING:   It might and often will have that operation and that, Justice Keane, is for this reason.  The obligation in 319 is, if I can use this expression, almost like a statutory promise imposed upon the person conducting the activity that they will not carry on an activity in a way likely to cause environmental harm. 

KEANE J:   I notice that (d)(ix) speaks of “a rehabilitation direction” so that it does seem that the idea of rehabilitation is something different from complying with the general environmental duty.

MR DUNNING:   That, in our respectful submission, would be to ask too much of the language – that is, it would be to say that what are set out in the subparts of subparagraph (d) are a set of mutually exclusive requirements.  That there might be overlap between those requirements is something that is, in our submission, a reasonable and unremarkable consequence.

KEANE J:   Are there provisions of the EPA that deal with the topic of rehabilitation?

MR DUNNING:   There are.  I do not have them at my fingertips.  I can have them extracted, yes.

KEANE J:   Separately from the general environmental duty?

MR DUNNING:   That is right.  I am told the rehabilitation direction is something issued on an application for the surrender of the environmental authority.  But it appears to respond to ‑ ‑ ‑

KEANE J:   So it is something that is ancillary to the determination of the tenement under which the activity lawfully occurs?

MR DUNNING:   In a specific instance – that is, the surrender.  That is where the holder wishes to surrender it, so it is a more limited matter, the one that your Honour has raised with me.  So getting back, Justice Gageler, then to your question, if there were to be a preliminary question at the outset as to is 319 engaged, the judges below were correct to treat 319 as having been engaged because – and our friends were right to treat it as having been engaged because there was no doubt that when the activity that caused the damage occurred there was the duty under 319(1) not to cause environmental harm.

To better secure that the Parliament by 358 has provided that an EPO can be given to secure that compliance.  That is why we made the submission earlier on, Justice Keane, that it would have an absurd result otherwise it would mean the EPO could only ever be issued in respect of prospective harm because otherwise you would always be met with that argument.  You would always be met with the argument that says well, no, what you are asking for is something that is to remediate past harm and that would, in effect, be to ‑ ‑ ‑

KEANE J: Why would not the order be under section 358, under (d)(ix)?

MR DUNNING:   Because we are dealing with a situation not where somebody has asked in that case to surrender but rather, in the present case, somebody has asserted “I don’t have to do that; I can rely upon another statutory regime that would allow me simply to disclaim” - that is our first response.  Our second response is to say there is nothing in what appears in (d) that suggests that they are a list of mutually exclusive topics and it would be surprising, in our respectful submission, that they were. 

It would be even more surprising if the reach of an environmental protection order to deal with the better performance and the better observance of a general environmental duty could only respond to prospective harm and not harm that has even only just happened, which would be the necessary consequence of the alternative argument.  That is why we say it was why it was not put against us below and rightly, and why the judges below rightly proceeded on the basis that 319 would be engaged.  I might accept that 319 and 358, in respect of this interaction, are not things of beauty in terms of drafting.  But our job is to give them a proper and meaningful construction and that is the one that is so.

GAGELER J:   There is an order that special leave to appeal is sought from at page 95.  It contains a direction.  Does that direction assume that the environmental protection order continues to have operation or is it simply agnostic as to that?

MR DUNNING:   In our submission, yes, because ‑ ‑ ‑

GAGELER J:   Yes to which part of the question?

MR DUNNING:   Yes to the fact that the environmental protection order is an efficacious order.  It still has operation because otherwise there would be no occasion to give the direction that is recorded there.

KEANE J:   If you want to talk about absurdity, there does not seem to be anything more absurd than ordering someone to go and perform activities

on land which they have no title to be on and in respect of which they have no title to be doing anything at all.

MR DUNNING:   I will admit an extreme example, Justice Keane, of why that that is not so.  Somebody goes – they have a load of contaminated material they do not want to pay for.  They go and dump it on somebody else’s land.  Their sole connection with the land is the trespass at that moment in time to dump it.  Yet you could not issue an environmental protection order against that person. 

Now, I have picked a necessarily extreme example, but that person will have engaged in an activity at a moment in time by dumping the material and it is said that you cannot because they do not have some tenure in the land. The duty is one that arises not because they are landowners but because they engaged in a particular activity. For so long as they engage in activity they had the duty. Section 358 then gives the power to compel compliance with that.

KEANE J:   In the example you give it looks like it would probably be an order under 358(d)(ii).

MR DUNNING:   It might be that as well, but if we take the example I just gave, one would wonder how a person who engaged in that activity would not be in breach of the general environmental duty.

KEANE J:   And an environmental protection policy as well.

MR DUNNING:   That may well be and that is my point about them not being a series of distinct non‑overlapping provisions.

GAGELER J:   Thank you, Mr Dunning.  Mr O’Donnell, do you have anything to add?

MR O’DONNELL:   No, your Honour.

GAGELER J:   We are of the opinion that the prospects of establishing the continuation of the obligation under the combined effect of sections 319 and 358 of the Environmental Protection Act 1994 (Qld) are insufficient to warrant the grant of special leave to appeal. The case presents as an inappropriate vehicle to consider the wider questions as to the operation of section 5G of the Corporations Act 2001 (Cth).

Special leave to appeal is refused with costs in each application.

AT 10.25 AM THE MATTERS WERE CONCLUDED