Dellworth Mining ProjectNuCoal owns 100% of Dellworth Pty Ltd (Dellworth). Dellworth holds exploration licence EL 6812 (Savoy Hill tenement) adjacent to mining operations owned and operated by Glencore, Coal & Allied and Anglo Coal. ... read more
In December 2009, NuCoal acquired all of the issued capital of Doyles Creek Mining Pty Ltd (DCM) for $94 million and thereby Exploration Licence 7270 (EL 7270).
On 23 November 2011, the NSW Government announced that the Independent Commission Against Corruption (ICAC) would be tasked with undertaking an inquiry into the circumstances of the initial grant of EL 7270 to DCM. ICAC is a tribunal and is not a judicial body (eg a Court). Its procedures do not afford parties the same protections and legal entitlements as a Court would dispense. By way of example, appearance before it is not automatic and the right to cross-examine witnesses, indeed the right to call witnesses, is severely circumscribed.
On 18 December 2013, ICAC delivered its final recommendatory report to the NSW Government. That report recommended among other things that EL 7270 be expunged or cancelled.
On 31 January 2014, the NSW Government passed unprecedented legislation to cancel EL 7270. The legislation passed by Parliament denies NuCoal the ability to seek compensation, notwithstanding that the ICAC recommended that any special legislation could be accompanied by a power to compensate any innocent person affected. The legislation also prevents the State from having any liability for its past conduct.
NuCoal and its investors not only relied on a validly issued and executed exploration licence (signed by Minister Macdonald as a representative of the Crown) as their basis for their investment, but also took comfort from a probity report commissioned by the NSW Government, which was made public in late 2010. That probity report confirmed that there was no impropriety in the granting of EL 7270 by Minister Macdonald.
There was no reason for NuCoal, an independent commercial entity, to question or go behind the validity of the licence granted by the Minister. Independent investors should be able to expect that when a licence is issued by a Minister of the Crown of a developed and renowned common law country that espouses the Western ideal that property rights are sacrosanct, ought to expect that those rights will not be taken away.
NuCoal and all of its innocent shareholders did not ever contemplate, and neither should they have, that the economic value of their investments would be depleted by Government action without compensation.
Neither NuCoal nor its current directors have ever been charged or convicted of any corruption, yet NuCoal is the only party affected by the alleged corruption of others in relation to the Doyles Creek tenement.
NuCoal will pursue all available actions to protect the legal rights of the Company and its shareholders.
Actions undertaken by the Company include:
Judicial Review Judgment
The Judicial Review Judgment was handed down by Justice Stephen Rothman on 24 September 2015.
On the legal aspects of NuCoal’s case, the Court could only review and comment on whether the Commission acted in accordance with its statutory and common law duties. The Court found that it did.
The Court, however, made clear statements about ICAC’s view as to NuCoal’s innocence, confirming that ICAC clearly acknowledged the following:
- “the difference in interest between the plaintiff, on the one hand, and on the other, those that were once its directors and against whom there were serious allegations of corruption…. the Commission also took the view that the plaintiff, as an entity, was involved in no wrongdoing and none of the Commission’s findings were based on any suggestion of the plaintiff being involved in wrongdoing.” 
- “The plaintiff’s submission was that its conduct was wholly innocent. The Commission accepted that view.” 
- “Ultimately the Commission came to the view that the plaintiff, as an entity, was not involved in any wrongdoing.” The above clearly demonstrates to NuCoal that despite ICAC forming a view that NuCoal was an innocent party and that innocent parties could be compensated, Parliament determined that NuCoal’s exploration licence should be cancelled with no compensation. The Court noted that “Parliament, not the Commission, has determined that if NuCoal be innocent, it ought not to be compensated.” 
NuCoal will continue to press for compensation for its US investors under Australia’s international treaty obligations.
Constitutional Challenge – High Court of Australia
Following the cancellation of EL 7270, NuCoal took the view that irrespective of what Minister MacDonald may or may not have done, NuCoal and its shareholders were the innocent victims of the actions of the NSW Parliament. NuCoal accordingly challenged the validity of the Act on the basis that the cancellation of EL 7270 was a punishment of NuCoal and its shareholders. NuCoal argued that the Act was invalid because the NSW Parliament impermissibly exercised judicial power and sought a ruling to that effect in the High Court of Australia.
NuCoal was unsuccessful in this challenge.
The decision of the High Court of Australia did not consider the question of whether the NSW Parliament could exercise judicial power. The judgment focused on whether the Act was a punishment or other exercise of judicial power. It concluded that the cancellation of EL 7270 and the Act did not amount to a punishment of NuCoal or its shareholders. Specifically, Parliament creates and grants mining rights so Parliament can take them away - without any compensation or recourse. "Legislative detriment cannot be equated with legislative punishment."
The High Court of Australia did not decide or comment on whether NuCoal was innocent of any misconduct, or whether the cancellation was warranted. It simply confirmed that the NSW Parliament has the power to pass the Act it did.
Free Trade Actions
The Company is continuing to pursue claims against the Australian Government on behalf of overseas based shareholders under various Free Trade Agreements (FTAs). These potential international actions are being progressed with a view to obtaining compensation from the Australian Government for the decision by the NSW Government to expropriate EL 7270 without payment of compensation. Some FTAs allow the Plaintiff (NuCoal shareholders who reside in the relevant jurisdictions outside Australia) to bring an action without needing the consent of the Australian Government (e.g. Australia’s Free Trade Agreements with Singapore, Hong Kong and others) while other FTAs require the consent of both the Government of the investor’s home country and the Australian Government before an action can proceed (e.g. the Australia – USA Free Trade Agreement).
Shareholders should note that any successful actions under an FTA will benefit only the shareholders who bring and participate in the actions.
Shareholders will continue to be updated on all proceedings outlined above as they progress.
Submissions to the Inspector of the ICAC and the ICAC Independent Review Panel
NuCoal has lodged formal submissions to both the Inspector of the ICAC, The Honourable David Levine AO RFD QC, and the ICAC Independent Review Panel, led by the former Chief Justice of the High Court, The Honourable Murray Gleeson AC QC.
The submissions illustrate the bias and inconsistency of ICAC in regard to Operation Acacia, its reporting and its aftermath. Copies of these submissions are available to shareholders on request.