The Environmental Protection Act 1994 (Qld) (
In the recent Federal Court decision of
The
Under section 493(2) of the
'Executive officer' is defined in Schedule 4 of the
- is a member of the governing body of the corporation; or
- is concerned with, or takes part in, the corporation's management,
whatever the person's position is called and whether or not the person is a director of the corporation.
It has been confirmed by the
Under the
In 2016, chain of responsibility provisions were included in the
In this case:
- there was a concurrent appointment of receivers and liquidators
- the receivers had the control of the mine site to the exclusion of the liquidators
-
the liquidators were concerned they were exposed to liabilities under the
EPA but had no control over the mine site, nor any involvement with the care and maintenance of the site.
To gain protection from potential liability under the
- the receivers were in control of the mining leases to the exclusion of the liquidators
- the liquidators were not an 'executive officer'
- the liquidators were not a 'related person'.
The receivers and the DES did not participate in the court proceedings.
Subject to some qualifications, the Court declared that the mining leases had been subject to the control of the receivers to the exclusion of the liquidators.
As to whether the liquidator was an 'executive officer,
The Court held that, even though there were concurrent appointments,
However, where there is a concurrent appointment it does not automatically follow that simply because a liquidator may be classified as an 'executive officer' that they will also be liable for environmental offences under the
For example, section 493(4) of the
- took all reasonable steps to ensure the corporation complied with the relevant
EPA provision; or -
was not in a position to influence the conduct of the corporation in relation to the relevant
EPA provision.
The Enforcement Guidelines provide, for example:
- ordinarily action will be taken against the company for offences by officers, agents, employees etc.
- action is only taken against an individual officer where there is evidence of their failure to comply with personal, statutory or employment obligations that has resulted in serious or material environmental harm. To demonstrate culpability, relevant factors include:
(a) negligent (whether wilful or not) actions or omissions
(b) illegal activities
(c) failure to take reasonable steps.
There are also guidelines dealing with the matters to be considered by the decision-maker at the DES when determining whether someone is a 'related person' (DES Guidelines).
In
The Court said it was the task for the decision-maker to ensure they are 'satisfied' that a person has a relevant connection, having regard to the provisions of the
The Court observed that the DES Guidelines indicate that, where there are concurrent appointments, the decision-maker will be required to consider (at minimum) the relationship between receivers, liquidators and the company, the terms of the appointment of the receivers, the respective specific roles, powers and responsibilities of the receivers and the liquidators during the relevant time and any relevant evidence that the liquidators seek to produce to the DES.
Although it was not declared that the liquidators were not a 'related person',
Where receivers have been in full management and control of the mining lease to the exclusion of the liquidators, it is very difficult to see how the liquidators will be held personally liable for environmental liabilities under the
Notwithstanding, there are prudent steps a liquidator can take to guard against the risk of potential liability under the
It is clear that receivers need to be aware of the significant risks of being personally liable under the
For the secured creditor, environmental liabilities can significantly devalue their security. A secured creditor should assess these risks before lending and monitor the risks on an ongoing basis.
Obviously, there are also significant risks for directors, other office holders and employees who may still have liability under the chain of responsibility for their role in the management of the mine.
© Cooper Grace Ward Lawyers
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