Axed coal licence left family venture with loan to repay

After talking to the NSW government for five years, drilling contractor Warwick Howarth felt he had no option but to resort to litigation to recoup the $28 million loss that he says was imposed on him by the government of former premier Barry O’Farrell.

“We pretty much exhausted all avenues with negotiation,” Howarth says.

“Most of the official responses come back with a bottom line that says ‘Sorry to hear of your circumstances. There is nothing we can do for you, we suggest you seek legal advice.’

“Well, I’ve taken their advice — I’ve taken it literally.”

He has filed proceedings in the NSW Supreme Court based on a constitutional argument that seeks to overturn the 2014 legislation that cancelled certain coal exploration licences.

Howarth says he is just one of the innocent parties who have been forced to pay the price of the NSW government’s action in stripping mining company NuCoal Resources of its exploration licence.

“They are expecting the innocent to foot the bill for their agenda. This is what they have done, not only to us but to others who have never been accused of wrongdoing.”

Before the O’Farrell government stripped NuCoal of its licence, Howarth Drilling had bought millions of dollars’ worth of heavy equipment to complete its contractual obligations with that company. The cancellation of the licence left Howarth Drilling without the expected revenue stream that would have serviced the debt on that equipment.

Just before this disaster, Howarth had been sounded out by a competitor who was interested in buying the business for about $20m.

“It is now worthless,” says Howarth.

“We had 30 employees, 20 of them permanent employees, and a number of small subbies who were very reliant on us.

“Out of the 20 permanent employees we actually had 10 family, nephews and husbands of daughters — I’ve got four girls and one son — everybody was involved with the business.

“They have all now been spread far and wide. A couple have started their own little businesses, others have gone and done whatever they can to survive, one is working underground in the coalmines — they have just been scattered far and wide.”

He says his wife, Terry, had looked after the company’s finances while he focused on engineering and field work.

“All of that is gone.”

Before the NSW government destroyed their business, the Howarths had spent 30 years building their company and had worked on projects in Australia, the US and China.

Howarth knows there is no guarantee that his legal action will succeed, but he says the intransigence of NSW has left him with no choice.

“At my age, and in the position we were left in, there is now no way I could even come close to re-establishing ourselves for a reasonable retirement,” he says.

Chris Merritt, Legal Affairs Editor
The Australian
WTF (used with permission)

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