Court of Appeal backs Liquidator looking behind regulations

Court Of Appeal Backs Liquidator In the ongoing battle of the Environment Protection Authority (“EPA”) v Orchard Holdings (NSW) Pty Limited (In Liquidation), the Supreme Court of New South Wales Court of Appeal (“Court of Appeal”) in essence determined that Legislative Regulations cannot go beyond what the power that are conveyed in their relevant Act permits.

Initially, the EPA sought to apply, among other things, penalties relating to the depositing of unauthorised waste on a site that was for a period of time operated by the insolvent entity. The claim for State Government levies, that was determined post the appointment of the Liquidator, was just under $50M, an amount that would effectively swamp the entirety of the remaining Creditors in the matter relative to the total available Assets remaining for distribution, that being just under $2M.

The key issue taken before the Court related to the EPA’s ability to levy fees that were relating to materials deposited or received prior to the entity’s occupation of the premises. In this regard the Court of Appeal not only confirmed the earlier Supreme Court of New South Wales decision of Young J (Acting) that they were not able to do so, but went further to say that the EPA’s interpretation of the relevant legislation would actually be ultra vires to the actually existing law, that is – outside of the ability of the law to affect any such claim.

Accordingly, the decision by the Court of Appeal now leaves the EPA in a position to either:

  1. Accept the Court of Appeal’s decision; or
  2. Make an application (with Special Leave) to have the matter contested before the High Court.

Should the EPA make an application to the High Court, Creditors would again need to wait for the outcome of that hearing to determine the quantum of their dividend (if any).