Cascade Coal Pty Ltd v New South Wales; Duncan v New South Wales; NuCoal Resources Ltd v New South Wales

The High Court has decided three related matters each challenging the constitutional validity of sch 6A of the Mining Act 1992 (NSW) on various bases. Following a finding by the Independent Commission Against Corruption that directors and shareholders of Cascade Coal had engaged in corrupt conduct, and recommended the cancellation of exploration licences held by two wholly-owned subsidiaries of Cascade Coal. The Director-General of the NSW Department of Trade and Investment invited the subsidiaries to make submissions on why the NSW Government should not cancel the licences. On 31 January 2014, the NSW Parliament passed the Mining Amendment (ICAC Operations Jasper and Acacia) Bill 2014, inserting sch 6A into the Mining Act 1992 (NSW) and cancelling the licences.

Duncan, a director and shareholder of Cascade Coal, challenged the validity of the amendment on three grounds. First, the amendment constitutes an exercise of judicial power by the NSW Parliament, contrary to Ch III of the Australian Constitution. Secondly, sch 6A is an exercise of judicial power in that it determines pre-existing rights and duties. Thirdly, sch 6A is not a ‘law’ within the meaning of s 5 of the Constitution Act 1902 (NSW) Cascade Coal supports Duncan’s submissions, and further submits that it is also inconsistent with the Copyright Act 1968 (Cth) and is invalid to the extent of that inconsistency under s 109 of the Australian Constitution. NuCoal likewise seeks a declaration that the amending act and sch 6A are invalid, on the basis of Ch III and inconsistency with the Copyright Act.

The High Court unanimously held that the challenged clauses in sch 6A were not invalid, and that the argued inconsistency with the Copyright Act did not arise on the facts of the special case. Rejecting the argument that the amendments were not a ‘law’ within the meaning of the NSW Constitution, the Court held that the word ‘laws’ in s 5 ‘implies no relevant limitation as to the content of an enactment of the New South Wales Parliament. In particular, the word carries no implication limiting the specificity of such rights, duties, liabilities or immunities as might be the subject of enactment or the purpose of their enactment.’: at [39]. The Court also rejected the judicial power argument. On its face the amendment act did not exhibit any ‘typical features’ of an exercise of judicial power (see at [42]). Nor did it constitute a ‘bill of pains and penalties’ as a legislative determination of a breach of a standard, or a penalty targeted at a particular person for that breach. Rather, the Parliament had, after considering the operational reports, ‘formed and expressed its own satisfaction that the administrative processes by which the three specified exploration licences were issued were tainted by corruption’ and then determined that it would be in the public interest to terminate those licences (see [44]ff). Finally, the Court held that no issue of inconsistency with the Copyright Act arose on the facts of the special case: NuCoal’s copyright is merely asserted, and there was no evidence that NSW has or threatens to infringe copyright interests of the other parties (see at [52]–[54]).

High Court Judgment [2015] HCA 13 15 April 2015
Result Challenged provisions not invalid
High Court Documents Cascade Coal
Full Court Hearings [2015] HCATrans 11 11 February 2015
[2015] HCATrans 9  10 February 2015
Leave Hearings [2014] HCATrans 211 17 September 2014
[2014] HCATrans 165  14 August 2014

10 thoughts on “Cascade Coal Pty Ltd v New South Wales; Duncan v New South Wales; NuCoal Resources Ltd v New South Wales

  1. The arguments put forth by state interveners in the NuCoal v NSW case are simply absurd. Examples are; “NSW colonial governors had absolute power and that power has been inherited by the NSW parliament.”, “the English Parliament had the right to pass bills of attainder and the NSW parliament has inherited this.” The nonsense is extreme.

    State interveners do not have to pay costs if the respondent state loses the case. My question is; do the intervenors get awarded costs if the plaintiff loses? If so, they have nothing to lose, but lots to gain.

    • Thanks for your comment. Under s 78A(1) of the Judiciary Act 1903 (Cth), the Attorneys-General of the Commonwealth or States can intervene as of right in cases in cases that arise under the Constitution or involve its interpretation. Under s 78A(2), the Court can, if it thinks fit, order costs against an intervening AG, but according to Burmester in the Oxford Companion to the High Court that is appropriate ‘only in special circumstances’ (O’Toole v Charles David Pty Ltd (1990) 172 CLR 232). My understanding is that this tends to happen if the intervening AG wants to mount arguments that the original parties are not seeking to put to the court which would prolong the proceedings in a way that is unfair to the main parties. Ordinarily though, I think intervening AGs tend to bear their own costs, and if the plaintiff loses he/she only has to pay the costs of the principal defendant (usually the State, in this case, just NSW), and vice versa. One example of this is in Williams No 2 [2014] HCA 23, in which all State AGs intervened, last year:

      Question 8
      What orders should be made in relation to the costs of this Special Case and of the proceedings generally?

      The defendants should pay the plaintiff’s costs of the special case. The costs of the proceeding are otherwise in the discretion of the single Justice who makes final orders disposing of the proceeding.

      • In Const. challenges the HC requires the plaintiff to notify all state AsG about 5mo before the HC will allow a hearing. All useless obstacles to dissuade challenges.

        The intervenors arguments are just plain wrong. (The act of 1689 outlawed attainder bills in the UK. Governors’ powers were withdrawn before 1901, etc) Apparently plaintiffs must not waste the court’s time, but lawyers can, and charge money for it.

        • My understanding was that the provision was introduced in the mid-1970s partly to deal with the expansion and changes to the federal court system; I’d imagine that the State AGs were eager to preserve some influence over how constitutional matters are argued and decided. There is some discussion of the history of s 78A and possible reforms in a 2001 ALRC report that might be worth a look at 180ff. No doubt the Court won’t take long to ignore the arguments you mention…

          • States don’t like being subject to the Const., and will put up any crazy argument. The intervenors quote the Kable case a lot, and out of context according to Sofranoff. The NSW Kable legislation was found to be a bill of pains and penalties. The successful appeal by NSW was to stop Kable applying for compensation for false imprisonment, not to re-instate the law.

            Our state courts would be very different if Const. rights could be argued, as in the US. The states would then stop ‘trying it on’ all the time.

  2. PS. The reason for cancelling the Cascade lease was unrelated to the NuCoal matter. Read the nitty gritty in the ICAC report. They alleged that Cascade directors did not notify ASIC about Obeid being in a joint venture with Cascade, nor about paying him $16M for them breaking the joint venture. Thus directors failed in their duty, under the fed ASIC regs, to notify ASIC.

    Cascade is privately owned, so subject to far less stringent requirements on directors. ASIC has still not made statements on the matter, and presumably does not care about the lack of notification. Thus ICAC can thus make up laws as they see fit. The Star Chamber also did this.

  3. PPS: The investors in NuCoal can still sue the NSW govt for being the victims of a ministerial scam, perpetrated by MacDonald. The mining legislation does not cover that, and does not even mention crimes nor names.

    Oddly, NSW now has a strong motivation to get MacDonald acquitted of all charges, to foil any such civil cases that would claim hundreds of $millions. Just watch Baird fiddle and meddle with the justice system to get MacDonald off. He already has the ammunition to do it – NSW SC1832, Stevenson J.

    NSW would have re-sold the NuCoal lease for at least $500M, even with the bad markets (profitable down to $40/ton). The lease was worth $500M but only accompanied by the JORC reports/plans. It is now worth the original $5M without the reports.

  4. PPS. American investors in NuCoal will now be attempting to get their compensation case heard in the US Trade Court, as per the FTA provisions (ASX:NCR announcement 2014. In the fashion of the Argentinian repayments case.) The Aus fed govt can veto this, but would put the FTA in jeopardy. The fed govt is liable for any compensation made under the FTA.

    US courts take a wider interpretation of bills of attainder, and due process. It could happen that US investors get compensated by the Aus fed govt, while Australian investors loose out

  5. From what you stated in your initial paragraph though this act of parliament quite likely sounded like a “penalty targeted at a particular person for that breach”. I would feel uneasy, also as a High Court, with setting such a precedent. Why not handle it differently by revoking such licenses through a branch of the executive, maybe make it effective immediately and let the case then work its way through the courts? Certainly the parliament did not rely on its own findings as it has normally no such investigative powers but took its cues from findings of the executive, a mining authorisation board or a public prosecutor? Why do these institutions, like a prosecutor, take their case to a court? We all know that there is a high probability that quite a few parliamentarians might themselves be on industrial payrolls as “advisors” and that in theory the termination of those licenses could have been “ruled upon by someone who acts for competing mining interests?! Why risk tarnishing the equity of licensing with such “acts” rather that “sentences”?

    • Thanks for your comment – I don’t know why they didn’t revoke it through the executive – without having read the relevant sections of the Mining Act about executive powers to cancel licenses, I’d imagine it was simply legally trickier to do so: my guess it that the grounds for a cancellation would have required something more serious, like an actual finding of a court that an offence had been committed in relation to the procurement of the leases, rather than just ICAC’s findings (and as the HCA notes, ICAC isn’t allowed to conclusively state whether it thinks an offence has been committed: ‘ICAC is nevertheless not authorised to include in a report any finding or opinion that a specified person is guilty of, or has committed, a criminal offence’: [14]). You’re right that the parliament didn’t rely on its own findings, but it did rely on the findings of a body established by its laws, ie ICAC – this method of parliament informing itself isn’t out of the ordinary, even if the subject matter is less run of the mill than other commissions of inquiry. Whether it would have been more proper for the Minister to cancel the licenses is, at the end of the day, really a political question: the HCA is only focused on whether it was within the power of parliament to amend the Act in the way that it did. It’s always important to remember that State parliaments in Australia have very wide legislative powers, and the use of them is mostly limited by what is politically acceptable (the only major legal constraints being those coming from the Commonwealth Constitution).

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