The Australian Sawmilling Co Pty Ltd (in liq) v Environment Protection Authority

The Australian Sawmilling Co Pty Ltd, in liquidation, sought to set aside the disclaimer of land by its liquidators. The liquidators had been indemnified against environmental liabilities, and the Environment Protection Authority (EPA) had provided an undertaking to limit the liquidators’ liability for cleanup costs to the amount recoverable through the indemnity. The EPA argued that setting aside the disclaimer would cause disproportionate prejudice to them, as they would be unable to recover cleanup costs if the disclaimer took effect. The matter was heard in the Supreme Court of Victoria.

The court considered whether the judge had erred in exercising their discretion to set aside the disclaimer. The court examined whether setting aside the disclaimer would cause prejudice to the EPA that grossly outweighed the prejudice to creditors. The court also considered the meaning of "occupier" under the Environment Protection Act 1970, whether liquidators could be occupiers, and the duties and powers of liquidators under the Corporations Act 2001. The court found no error in the judge's exercise of discretion, as the EPA would suffer significant prejudice if the disclaimer was set aside.

The court concluded that there was no inconsistency between the Environment Protection Act 1970 and the Corporations Act 2001, as the Corporations Act s 545 was not engaged, and the scope of s 5G(11) was unnecessary to determine. The court applied the decision in Re Amerind Pty Ltd; Commonwealth of Australia v Byrnes and found that the liquidators were not occupiers of the land for the purposes of the Environment Protection Act.

The Supreme Court of Victoria dismissed the liquidators' application to set aside the disclaimer of land, finding that the judge had not erred in exercising their discretion. The court found that the EPA would suffer significant prejudice if the disclaimer was set aside, as they would be unable to recover cleanup costs. The court also found that there was no inconsistency between the Environment Protection Act and the Corporations Act, and that the liquidators were not occupiers of the land for the purposes of the Environment Protection Act.