I very much agree with your views having some knowledge of commercial law.
What has muddied the waters here and the legal position is how the judge will view any subsequent legislation after the license to drill was awarded. Question, can state government write laws to absolve, indemnify themselves of all and any legal responsibilities, under any circumstances. This is what the State Government of Victoria is trying to achieve.
If this is allowed to stand, well this would be an assault on the rule of law and the laws that govern us. It sends a message to any company, person wanted to invest or be commercially minded.
Reading the legislation passed in 2017, the government appears to have sought to exempt itself from all and any type of liability, or compensation. To this end they don’t have appeared to want to consult, enter into discussions with any company to ensure any financial loss, or impact is mitigated. They have declined any form of arbitration, which the court favours in all civil cases, with court really being the last resort if matters can’t be resolved equitably.
The state government have not only declined arbitration, the State minister for Victoria tried to have this case summarily dismissed shows intent.
We’re not dealing with taxes, illicit, or illegal trade. We’re dealing with Mining and licenses to mine. This has been the bedrock of the Australian economy for nearly a century. To Act with such impunity in regards to commercial agreements in the form of mining licences raises a number of red flags for all oil and gas companies with licenses.
If i was the presiding judge, i’d be looking also to see how the government dealt with other companies in the same situation that were already drilling to see if the laws have been applied consistently. Or has there been any discretion, favour shown to other companies but not LKO ? If there has been, then again the Judge will come down hard on the government.
This judge i can see has written a number of papers which have examined existing laws and their interpretation and inadequacies.
However, the simple fact is that this matter deals with one of the oldest forms of law, contract law. LKO having entered into an agreement ensuring that it has been compliant with all the rules and measures laid out, finds itself having invested substantial sums on the basis that it had secure a long term contract to explore, to then find that an incoming government ripping that contract up and also passing laws to exempt itself from any liability.
How will a judge see this !! Well any judge will not take such actions lightly. Two questions need to be answered.
Is the license still valid, and is LKO within its rights to continue exploring.
How much will the judge award if he finds that the state government have breached this contract. Perhaps the judge can use the same measures laid out in the law where a mining company breaches it’s license and apply them to the government. However, a more practical way is to use the financial records of the company.
In my mind this has all the makings of a legal precedence to be set. I say this based on the “rule of law”. The laws by which governments “govern” and the laws by which “govern the people”. Governments of course can pass legislation, however, if a Government is allowed to effectively set a precedence which says a government can breach and exit any contract it wants without compensation would be a dark day.
We see good examples of where the UK government is struggling to deal with franchise and licenses for railway companies in the uk. In some cases, they have to wait for those licences to expire, or fairly compensate the franchise it wishes to remove the license from.
Back here in Australia, you’d be given to think this type of action is acceptable and entirely legal !!
Lets see what the right hon judge has to say in his ruling !!
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