Following recommendations by the Independent Commission Against Corruption, both houses of the NSW government comfortably passed the amendment to specifically cancel NuCoal’s Doyles Creek and Cascade’s Glendon Brook and Mt Penny exploration licences in late January 2014.
At the time ICAC believed this legislative path would “have the benefit of reducing risks arising from challenges in the courts to any ministerial decision to cancel or not renew current [licences]".
In implementing the amendment, the government also took into account the ICAC inquiry evidence that the processes which led to the grant of the blocks were “tainted” by serious corruption.
The court challenge to this move which stripped the licences was based on three key arguments that the High Court dismissed.
The first was that the Amendment Act was not a law in accordance with the NSW constitution – which the High Court disagreed with on the basis there was “no relevant limitation as to the content of an enactment of the New South Wales Parliament”.
The second was that the amendment amounted to an unconstitutional legislative exercise of judicial power by parliament. However, the court found the amendment had none of the typical features of an exercise of judicial power.
The last argument was that the amendment was inconsistent with the Copyright Act and inoperative to the extent of that inconsistency.
“This question does not arise on the facts of the special case,” was the High Court’s response.
Duncan, the former chairman of Felix Resources who entered rich lists after that company was taken over by Yanzhou Coal Mining in 2009, plus privately held Cascade and Australia-listed NuCoal were ordered to pay costs for the case.
NuCoal entered a trading halt following the news. Its shareholders were hit hard by the 2014 cancellation of the licence which underpinned the flagship Doyles Creek coal project.
NuCoal has separately taken legal action to overturn certain ICAC findings and recommendations and is seeking compensation under Australia-US Free Trade Agreement liabilities.
While the coal market downturn has made the Hunter Valley-based Doyles Creek area less valuable, NuCoal was initially seeking $500 million of compensation for the loss of the permit.
