Linc Energy's liquidators are justified in not causing Linc to comply with an environmental protection order, the top court has ruled.
Linc Energy's liquidators are justified in not causing Linc to comply with an environmental protection order, the top court has ruled. Alasdair Young

Linc stink: Court ruling sparks 'grave concern'

THE latest drama involving fallout from the Linc Energy pollution disaster has sparked a call for urgent reform.

Queensland's government has lost a quest to make Linc liquidators liable for clean-up costs at the notorious Chinchilla site.

The High Court of Australia refused a State Government appeal after complex environmental and corporate law arguments.

"It's very significant across Queensland because you'd be aware of mining companies going broke and leaving the public to clean up the mess,” Environmental Defenders Office chief executive Jo Bragg said on Wednesday.

"This is a matter of grave concern and needs serious debate and discussion about reform.”

Previously, Justice David Jackson ruled liquidators could not let Linc ignore an environmental protection order, or EPO.

But on March 9, Queensland Court Of Appeal overturned Justice Jackson's decision.

The appeal court said once liquidators "disclaimed” the land, attached liabilities ended, including liabilities under the EPO.

The Queensland Attorney-General then appealed to the High Court.

High Court transcripts released on Wednesday showed the hearing also involved arguments over Federal or State legal supremacy.

Queensland Attorney-General's barrister Peter Dunning told the High Court some of the issues "have been rarely litigated”.

The court heard about Commonwealth law, which defined how liquidators could disclaim property like "land burdened with onerous covenants”.

Queensland's Environmental Protection Act's section on environmental duty was also discussed.

Mr Dunning said "an apparent direct inconsistency” existed between State and Commonwealth law in some aspects.

For Linc's liquidators, barrister Bret Walker said the case raised no issue about liabilities accruing in the past.

Previous judges already dealt with a "cascade of fallback arguments,” Mr Walker said.

"I mean it is politically interesting and important, but it happens, like all such political compacts, to have produced a legislated articulation which notoriously has difficulties,” Mr Walker said, referring to a section of the Corporations Act.

Legal commentators Murrays Legal previously said the case highlighted ongoing "legal and policy tension” between insolvency and environmental law.

A Linc liquidator was contacted for comment.

This year, Linc, in liquidation, was fined $4.5million for damage from underground coal gasification.

- NewsRegional

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