Coal group NuCoal to test state authority by:ANTHONY KLAN From:The Australian June 27, 201412:00AM Reporter-Investigations Unit Sydney THE authority of the states to confiscate assets without due process will be tested in the High Court by coal group NuCoal after the NSW government scrapped coal licences it held worth more than $100 million. In January, the state government cancelled rights, without compensation, to coal tenements owned by NuCoal and also by miner Cascade Coal after corrupt former Labor powerbroker Eddie Obeid was found to own land above the tenements and to also have held a secret stake in Cascade Coal. NuCoal’s operations are not connected to Cascade Coal and each hold separate tenements in the Bylong Valley, northwest of Sydney. The landmark case will test the ability of the states to remove property without due process. The federal government is prevented from doing this under the Constitution, but the states are not. In documents lodged with the High Court,the listed NuCoal will argue that the NSW government confiscated its property — the licences — without “due process” and had failed in its obligation to retain separation of powers. NuCoal will argue the government had acted as “judge and jury” in deciding the licences were corruptly granted and by rescinding the licences. If the NSW government loses the case it could be forced to pay damages of $1 billion or more. Lawyer Michael Mills, who is representing NuCoal in the action, said the case was a matter of sovereign risk and would be closely watched by international investors. “Like most Australians, I work on the basis the government can’t take my assets from me without due process,” he said. “But it turns out while the commonwealth government can’t do that under the Constitution, the states can.’’ Law in the UK and the US specifically prevented the government from taking property without due process, he said. Mr Mills said the NSW government’s suspension of coal seam gas operator Metgasco’s northern NSW licences earlier this year had also sent the wrong message to international investors.
Posted on: Thu, 03 Jul 2014 05:19:00 +0000
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