Federal Court of Australia

Clean Energy Regulator v Emerging Energy Solutions Group Pty Ltd (in liq) (No 2) [2026] FCA 12

ORDERS

THE COURT NOTES THAT:

1.    The applicant has given undertakings to indemnify the liquidators of the first respondent against any adverse costs order made against them in the proceeding; to refrain from joining the liquidators of the first respondent personally or from seeking any judgment against them in their personal capacity in the proceeding; and to refrain from enforcing any pecuniary penalties against the first respondent without obtaining the leave of the Court.

THE COURT ORDERS THAT:

1.    Pursuant to s 500(2) of the Corporations Act 2001 (Cth) the applicant is granted leave to proceed against the first respondent.

2.    Pursuant to rr 8.21 and 16.53(1) of the Federal Court Rules 2011 (Cth), the applicant has leave to file and serve an amended originating application and amended statement of claim in the form set out at pp 234–255 of the affidavit of David Alexander Grant affirmed on 16 July 2025.

3.    Subject to further order, the liquidators for the first respondent are excused from further appearance in the proceeding.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

HORAN J:

1    By an interlocutory application filed on 20 August 2025, the Clean Energy Regulator seeks leave under s 500(2) of the Corporations Act 2001 (Cth) to continue this proceeding against the first respondent, Emerging Energy Solutions Group Pty Ltd (ACN 152 953 412).

2    In the substantive proceeding, by its originating application filed on 22 March 2024, the Regulator sought declarations and civil penalty orders against Emerging Energy and its director, Mr Shamsuddin Shaikh, in respect of alleged contraventions of the Australian National Registry of Emissions Units Act 2011 (Cth) (ANREU Act) and the Australian National Registry of Emissions Units Regulations 2011 (Cth) (ANREU Regulations) between 22 May 2022 and 3 May 2023.

3    On or about 24 July 2024, Emerging Energy entered a creditors’ voluntary liquidation, upon which the proceeding against it was stayed by operation of s 500(2) of the Corporations Act.

4    On 14 January 2025, the proceeding against Mr Shaikh was dismissed by consent, pursuant to a Deed of Resolution and Undertaking entered into between Mr Shaikh and the Regulator.

5    The Regulator now seeks leave to continue the proceeding against Emerging Energy, and to amend its originating application and statement of claim so as to reflect the dismissal of the proceeding against Mr Shaikh and to clarify the scope of the relief sought against Emerging Energy. As a condition of such leave being granted, the Regulator undertakes not to enforce any pecuniary relief against Emerging Energy without the grant of further leave by the Court. The Regulator has also given undertakings to indemnify the liquidators of Emerging Energy against any adverse costs orders in the proceeding, to refrain from joining or seeking judgment against the liquidators personally, and to seek an order excusing the liquidators from appearing in the proceeding.

6    For the following reasons, I am satisfied that it is appropriate to grant leave under s 500(2) of the Corporations Act for the Regulator to proceed against Emerging Energy.

BACKGROUND

7    The background to this matter is set out in my reasons for judgment in Clean Energy Regulator v Emerging Energy Solutions Group Pty Ltd [2024] FCA 1310 at [6]–[20]. The following summary is drawn from those paragraphs.

8    The ANREU Act continues in existence and gives statutory force to the Australian National Registry of Emissions Units, which records and tracks the issuance, holding, transfer and acquisition of Australian Carbon Credit Units (ACCUs) issued under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) (Carbon Farming Act).

9    The Regulator relevantly claims that, between 22 May 2022 and 3 May 2023, Emerging Energy contravened s 27(4) of the ANREU Act by failing to comply with reg 33(1)(d) and (e) and reg 34(2)(a), (b) and (c) of the ANREU Regulations. The alleged contraventions relate to non-compliance with the requirements governing the operation of Registry accounts.

10    Registry accounts must be opened in the name of a particular person: ANREU Act, s 10(2). The Regulator must be satisfied of the identity of the person in whose name the account is to be opened, and must be satisfied that the person passes the fit and proper person test: ANREU Regulations, reg 13(2)(a), (c). The fit and proper person test is defined by reference to its meaning in the Carbon Farming Act, read with the Carbon Credits (Carbon Farming Initiative) Rule 2015 (Cth).

11    The person in whose name a Registry account is opened may (or, if the person is not an individual, must) nominate an authorised representative: ANREU Regulations, reg 9(2). An authorised representative may be given access to a Registry account only if the Regulator is satisfied of his or her identity and that he or she passes the fit and proper person test: ANREU Regulations, reg 31(2), (4), (5).

12    Under reg 33 of the ANREU Regulations, a registered holder must notify the Regulator of various changes within 28 business days after the change takes place, including “a change of the contact details of the registered holder’s authorised representative” and “a change that causes the registered holder, or the registered holder’s authorised representative, to no longer pass the fit and proper person test”: reg 33(1)(d), (e).

13    Regulation 34(2) of the ANREU Regulations provides:

(2)     A registered holder:

(a)    must maintain the security of user names and passwords issued to the holder and to its authorised representatives (if any) for the purpose of accessing the Registry;

(b)    must not allow any other person to gain, or try to gain, unauthorised access to the Registry, the Registry’s server, or any other server, computer or database related to the Registry; and

(c)    must ensure that its authorised representative does not allow another person to gain unauthorised access to the Registry, as described in paragraph (b).

14    Section 27(4) of the ANREU Act, which requires the holder of a Registry account to comply with requirements under the ANREU Regulations, is a civil penalty provision for the purposes of Part 7 of the ANREU Act.

15    The alleged contraventions by Emerging Energy of regs 33 and 34 of the ANREU Regulations arise from circumstances in which an employee who was not its authorised representative allegedly accessed its Registry account and carried out transactions involving transfers of ACCUs.

16    In a letter to the Regulator dated 21 April 2023, Emerging Energy denied that its Registry account had been accessed without authorisation. It claimed that its authorised representative had been “suffering from ongoing personal issues” associated with anxiety and depression, and had been on personal leave during the relevant period. However, the authorised representative made a power of attorney under which another staff member “was permitted to handle all matters regarding his involvement at Emerging Energy, including his access to the ANREU account”.

17    In its statement of claim, the Regulator alleged that, in circumstances where its authorised representative did not have capacity to work as a result of his medical condition, Emerging Energy was obliged by reg 33(1)(d) and (e) of the ANREU Regulations to notify the Regulator of a change in the contact details of its authorised representative (arising from his extended personal leave), or to notify the Regulator of a change that caused the authorised representative “to no longer pass the fit and proper person test” as result of his incapacity. As discussed below, the Regulator does not press the alleged contravention of reg 33(1)(e).

18    Further, the Regulator alleged that Emerging Energy contravened reg 34(2)(a) of the ANREU Regulations by failing to maintain the security of user names and passwords issued for the purpose of accessing the Registry. The Regulator alleged that Emerging Energy contravened reg 34(2)(b) and (c) by allowing a person other than its authorised representative to gain unauthorised access to the Registry, and failing to ensure that its authorised representative did not allow another person to gain unauthorised access to the Registry. For such purposes, the Regulator alleged that the authorised representative was not capable of authorising another person to access the Registry account kept in the name of Emerging Energy, and that the enduring power of attorney made by the authorised representative was revoked by reason of his incapacity during the relevant period. The latter allegation is no longer pressed.

19    Prior to entering into liquidation, Emerging Energy filed a defence in which it denied the alleged contraventions of reg 33(1)(d) and (e) and reg 34(2)(a) and (b) of the ANREU Regulations. Emerging Energy admitted having contravened reg 34(2)(c) by failing to ensure that its authorised representative did not allow another person to gain access to the Registry. However, it denied that the (admitted) medical condition of its authorised representative amounted to an incapacity to work, or that there was an obligation to notify the Regulator of any change arising from the medical condition of its authorised representative.

20    The Regulator seeks leave to amend its originating application and statement of claim, so as to remove the claims and allegations made against Mr Shaikh. In the proposed amended statement of claim, the Regulator no longer alleges that the power of attorney given by the authorised representative was revoked by reason of his incapacity. Further, the Regulator no longer alleges that the authorised representative’s incapacity for work was itself a change that caused him to no longer pass the fit and proper person test for the purposes of reg 33(1)(e) of the ANREU Regulations, or that Emerging Energy contravened reg 33(1)(e) by failing to notify the Regulator of that change. This means that it will not be necessary to determine whether or not the authorised representative was a fit and proper person in circumstances where he was incapacitated for work for an extended period due to depression, anxiety or agoraphobia.

21    However, the Regulator continues to allege that Emerging Energy breached reg 33(1)(d) by failing to notify a change of the contact details of the authorised representative in circumstances where he was incapacitated for work and on leave. The Regulator otherwise maintains its claims that Emerging Energy breached reg 34(2)(a), (b) and (c) by failing to maintain the security of user names and passwords, by allowing persons other than its authorised representative to gain unauthorised access to the Registry, and by failing to ensure that its authorised representative did not allow another person to gain unauthorised access to the Registry.

APPLICABLE PRINCIPLES

22    Section 500(2) of the Corporations Act provides:

After the passing of the resolution for voluntary winding up, no action or other civil proceeding is to be proceeded with or commenced against the company except by leave of the Court and subject to such terms as the Court imposes.

23    In broad terms, the purpose of s 500(2) is to prevent a company’s assets being dissipated by unnecessary litigation: In the Matter of DSHE Holdings Limited (recs and mgrs appointed) (in liq) [2018] NSWSC 82 at [18] (Black J); ZOLL Medical Australia, in the matter of Cardiac Defibrillators Australia Pty Ltd (in liq) v Cardiac Defibrillators Australia Pty Ltd (in liq) [2022] FCA 167 at [25(a)] (Halley J); Clean Energy Regulator v E Connect Solar & Electrical Pty Ltd [2023] FCA 1082 at [10] (Derrington J). As was stated by McPherson J (with whom W B Campbell CJ and Sheahan J agreed) in Re Gordon Grant & Grant Pty Ltd [1983] 2 Qd R 314 at 316, “without the relevant restriction, a company in liquidation would be subjected to a multiplicity of actions which would be both expensive and time-consuming, as well in some cases as unnecessary”.

24    In order to obtain leave under s 500(2), the applicant must demonstrate that it is more appropriate for the particular claim to proceed by way of action rather than by submitting a proof of debt with the liquidator: Gordon Grant at 317; Eopply New Energy Technology Co Ltd v EP Solar Pty Ltd [2013] FCA 356 at [22(b)] (Foster J). The decision whether to grant or refuse leave is discretionary: Gordon Grant at 315; Rushleigh Services Pty Ltd v Forge Group Ltd (In Liq) (Receivers and Managers Appointed); In the Matter of Forge Group Ltd (In Liq) (Receivers and Managers Appointed) [2016] FCA 1471 at [15(a)] (Foster J); E Connect Solar at [14] (Derrington J). The factors relevant to the exercise of discretion include (without limitation): whether the claim has a solid foundation and gives rise to a serious question to be tried; the amount and seriousness of the claim; the degree of complexity of the legal and factual issues involved; the stage to which the proceedings may have progressed; and any potential prejudice to creditors: Gordon Grant at 317; Vagrand Pty Ltd (In Liq) v Fielding (1993) 41 FCR 550 at 554–6 (Wilcox, Burchett and Beazley JJ); DSHE Holdings at [18]; E Connect Solar at [15]–[17] (Derrington J).

25    The circumstance that the relief sought could not have been obtained in the winding up, and is therefore not available otherwise than by the commencement of the action, may be a significant factor in favour of the grant of leave: Vagrand at 553; Australian Competition and Consumer Commission v Link Solutions Pty Ltd [2008] FCA 1790; 68 ACSR 561 at [11] (Bennett J); Australian Competition and Consumer Commission v Birubi Art Pty Ltd (No 2) [2018] FCA 1785 at [15] (Perry J). Certain kinds of claims may be such that they cannot be accommodated within the proof of debt regime and can only be resolved by court proceedings: see ZOLL Medical at [25(h)]. This is usually the case in respect of proceedings brought by a regulator to enforce civil penalty provisions, which “do not represent a choice as is often available in a liquidation, between an action and a proof of debt”: Link Solutions at [11]; Birubi Art at [15]; Commissioner of the NDIS Quality and Safeguards Commission v Aurora Community Care Pty Ltd (in liq) [2024] FCA 679 at [20] (Abraham J).

26    Where leave is sought by a regulator to commence or proceed with civil penalty proceedings, weight may be given to public interest or public policy considerations, including the purpose of general deterrence: Fair Work Ombudsman v Foot & Thai Massage Pty Ltd (in liq) [2019] FCA 1601 at [15] (Katzmann J); Australian Competition and Consumer Commission v Artorios Ink Co Pty Ltd [2013] FCA 753 at [9]–[11] (Mortimer J); Australian Competition and Consumer Commission v Cornerstone Investment Aust Pty Ltd (in liq) (No 5) [2019] FCA 1544 at [31]–[36] (Gleeson J); Secretary, Department of Health and Aging v Prime Nature Prize Pty Ltd (in liq) [2010] FCA 597 at [22]–[23] (Stone J); Commissioner of the NDIS Quality and Safeguards Commission v Irabina Autism Services (in liq) [2024] FCA 1468 at [19], [28] (Horan J). In that context, the inability of the company in liquidation to pay any penalty that might be imposed does not weigh against the grant of leave: Birubi Art at [14] (Perry J); E Connect Solar at [17(h)] (Derrington J).

27    The “public interest factors” favouring the grant of leave in such proceedings were summarised by Bromwich J in Australian Competition and Consumer Commission v Australian Institute of Professional Education Pty Ltd (in liq) [2017] FCA 521 at [26]:

(1)     the purpose of a civil penalty, and thus of such proceedings, is primarily if not wholly protective in promoting the public interest in compliance, by putting a price on contravention that is sufficiently high to deter repetition by the contravener … and by others tempted to contravene: Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 326 ALR 476 (the CFMEU civil penalty case) at 490 [55], quoting Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152;

(2)     capacity to pay any penalties imposed was not a proper or relevant consideration: Australian Competition and Consumer Commission v Leahy (No. 2) [2005] FCA 254; (2005) 215 ALR 281 at 285 [11];

(3)     even if a company is in liquidation, it may still be appropriate to order that it pay penalties as a measure of the Court’s disapproval of the contraventions and as a measure of the seriousness in which they are regarded, including for the purposes of general deterrence: Australian Competition and Consumer Commission v SIP Australia Pty Limited [2003] FCA 336; (2003) ATPR 41-937 at 47,077-8 [59] - it was not suggested that this principle was diminished in a material way by such penalties not ultimately being recoverable by reason of the respondent being in liquidation;

(4)     the ACCC as the body enforcing the civil penalty provisions in question has a real interest in seeking declaratory relief to vindicate a public right that the ACL has been breached: Australian Competition and Consumer Commission v Goldy Motors Pty Ltd [2000] FCA 1885; (2001) ATPR 41-801 at 42,630 [30]; Australian Competition and Consumer Commission v Pacific Dunlop Limited [2001] FCA 740; (2001) ATPR 41-823 at 43,098-9 [63]-[69] - a point that may be seen to apply equally in respect of the other relief sought; and

(5)     there is a significant public interest in declarations of contravening conduct and imposition of penalties being on the public record in aid of deterrence, which is not defeated by the fact that the company is in liquidation and unable to pay the penalties: Secretary, Department of Health and Ageing v Prime Nature Prize Pty Ltd (in liq) [2010] FCA 597 at [22]-[23].

CONSIDERATION

28    In support of its interlocutory application, the Regulator relies on:

(a)    an affidavit of David Alexander Grant, a partner of the firm of solicitors acting for the Regulator, affirmed on 16 July 2025 (Grant Affidavit);

(b)    an affidavit of Jane Wardlaw, General Manager for the National Greenhouse and Energy Reporting and Safeguard Branch within the Regulator, affirmed on 14 August 2025 (Wardlaw Affidavit);

(c)    an affidavit of Talitha Thomas, a legal practitioner employed by the Regulator’s solicitors, affirmed on 20 August 2025 (Thomas Affidavit); and

(d)    an outline of submissions dated 3 September 2025.

29    On 24 July 2024, Mr Graeme Beattie and Mr Matthew Kucianski were appointed as the liquidators of Emerging Energy. The liquidators issued a report to creditors on 23 October 2024.

30    On 6 December 2024, the Regulator and Mr Shaikh entered into the Deed, under which they agreed to resolve the proceeding between them. Mr Shaikh undertook that he would not participate or hold any authorised position in any scheme managed by the Regulator, and that he would not be a director, officer or shareholder of a company that is a participant in any such scheme. It was agreed that the proceeding as against Mr Shaikh would be dismissed, and that Mr Shaikh would pay a fixed amount of $35,000 in respect of the Regulator’s costs. Mr Shaikh agreed that the Regulator would publicise his undertaking, and the Regulator agreed that any announcement of the outcome of the proceeding would expressly acknowledge that Mr Shaikh denied the allegations against him and gave the undertaking voluntarily and without admission of those allegations.

31    On 18 December 2024, the Regulator’s solicitors informed the liquidators of Emerging Energy that the Regulator intended to apply for leave under s 500(2) of the Corporations Act, and foreshadowed an application for summary judgment against Emerging Energy based on the admissions made in its defence, among other things. The Regulator noted that obtaining a determination whether the civil penalty provisions were contravened by Emerging Energy and the applicable penalty for any such contravention would “create valuable precedent for the Regulator”.

32    On 14 January 2025, the solicitors acting for the liquidators advised the Regulator that they anticipated receiving instructions “to neither consent to nor oppose” the application for leave to proceed against Emerging Energy and any subsequent application for summary judgment, subject to the Regulator agreeing to specified conditions, including to indemnify the liquidators against any costs in the proceeding, to excuse the liquidators from appearing in the proceeding, and to give an undertaking not to seek any judgment against the liquidators in their personal capacity and not to enforce any civil penalty without obtaining the leave of the Court.

33    On 30 January 2025, the Regulator indicated that it was prepared to indemnify the liquidators against any adverse costs order made against them in the proceeding, and agreed to seek an order to excuse the liquidators from appearing in the proceeding. The Regulator was otherwise content to agree to the substance of the conditions that had been proposed by the liquidators.

34    After exchanging correspondence on the scope of the costs indemnity and the terms of the proposed undertaking, the Regulator and the liquidators ultimately reached an agreement that the liquidators would neither consent to nor oppose the application for leave to proceed against Emerging Energy under s 500(2) of the Corporations Act and the Regulator would give the following undertakings:

(a)    to indemnify the liquidators against any adverse costs order made against them in the proceeding;

(b)    to seek an order from the Court excusing the liquidators from appearing in the proceeding;

(c)    to refrain from joining the liquidators personally to the proceeding;

(d)    to refrain from seeking any judgment against the liquidators in their personal capacity in the proceeding; and

(e)    to refrain from enforcing any civil penalty against Emerging Energy without obtaining leave of the Court.

35    The Wardlaw Affidavit describes the history and functions of the Registry. Ms Wardlaw states that the Regulator has an important role in ensuring the integrity of the Registry, which she says “is crucial to Australia’s engagement with its international commitments to reduce greenhouse gas emissions pursuant to the Protocol and the Paris Agreement by ensuring that international units under the Protocol and the Paris Agreement are validly acquired, transferred and retired”. Ms Wardlaw relevantly states:

[T]he ANREU Registry is crucial in giving assurance that ACCUs are validly bought and sold without fraudulent interference, providing a secure register of account holder assets, and ultimately providing appropriate market protection, stability and confidence.

Knowing that transactions undertaken in the ANREU Registry are done by identified fit and proper persons gives confidence that these transactions are authorised and made by the right people, for the right reasons.

Doubt as to whether unidentified persons are making unauthorised transactions in the ANREU Registry could call into question the integrity of the ANREU Registry and whether the Regulator is able to adequately manage the security of the assets held within it, and claims made about the use of units and Australia’s ability to adequately demonstrate its achievement against the Protocol and Paris Agreement.

Unauthorised use of ANREU Registry accounts could lead to reputational damage to the Regulator and a perception of its inability to securely operate the ANREU Registry, in turn, leading to the following consequences:

(a)     market confidence in the trade of ACCUs may diminish;

(b)     the value of ACCUs may diminish;

(c)     the prospect of carbon abatement through Declared Projects may be jeopardised;

(d)     the entire market for ACCUs and International Emissions Units may be brought into disrepute;

(e)     Australia’s ability to adhere to its commitments and responsibilities to reduce the effects of climate change pursuant to the Protocol and the Paris Agreement may be compromised; and

(f)     Australia’s ability to compete in the international market for International Emissions Units may be compromised.

36    In explaining the importance of the declarations sought by the Regulator in this proceeding, Ms Wardlaw states:

This is the first civil penalty proceeding that has been commenced by the Regulator for the enforcement of civil penalty provisions in the ANREU Act as a means of maintaining confidence in the Regulator’s maintenance of the ANREU Registry.

The Regulator desires, through this proceeding, to further emphasise the need to keep secure access details for all the registries it administers, though specifically in this case the ANREU Registry.

In recent years, the Regulator has published and provided reminders to the clean energy market regarding the need to keep access details secure for the ANREU Registry:

…

The Regulator considers the alleged contraventions against the First Respondent are of an extremely serious nature, because they risk compromising the integrity of the ANREU Registry.

Declarations of the kind sought in the Originating Application filed on 22 March 2024 will serve to reinforce the Regulator’s published position within the clean energy market of the need to keep secure access details for registries. This reinforcement will come about, significantly, through judicial consideration of the scheme, published pecuniary penalties, and any related findings and observations about the security of access information.

The Regulator acknowledges that findings, observations and conclusions made on the ANREU Registry and ANREU Act are ultimately a matter for judicial determination. The Regulator, however, desires to press the importance of security of access information and considers there is a public interest, within the clean energy market, in judicial consideration and comment on the Regulator’s view of the level of that importance.

There is also a significant public interest in a declaration of contravening conduct of the ANREU Act and Regulations, and any corresponding civil penalty being on the public record, to deter against future non-compliance with the ANREU Act and Regulations. The general deterrence function is particularly important in this instance, because it is the first time that the Regulator has sought to enforce non-compliance with the ANREU Act and Regulations by issuing a civil penalty proceeding …. The general deterrence function will not be defeated by [Emerging Energy] being in liquidation.

Another deterrence measure employed by the Regulator is the publication of news items detailing penalties, convictions, enforceable undertakings, administrative suspensions and other enforcement actions as part of the Regulator’s commitment to transparency, deterrence and public accountability. If the Regulator is granted leave to proceed against the First Respondent and the Regulator ultimately obtains judgment against [Emerging Energy] on liability and any corresponding penalty, the Regulator intends to employ this deterrence measure by publishing a media release with details of any judgment obtained.

Building public trust in the integrity of the Regulator’s schemes promotes the objectives of the climate change law in Australia that the Regulator administers. It encourages the compliant behaviour of the broader regulated community by using reputational incentives to advance voluntary compliance and reduce the need for repeated administrative enforcement. If the Regulator is granted leave to proceed against [Emerging Energy] and ultimately obtains a favourable judgment against [Emerging Energy], this outcome will contribute to building public trust in the integrity of the Regulator’s schemes, and in particular, the ANREU Registry.

37    In support of its interlocutory application, the Regulator submitted that there is a high public interest in the grant of leave to proceed against Emerging Energy, so as to demonstrate to the public that corporations are required to keep secure access details for the registries administered by the Regulator, and thereby “reinforce the Regulator’s published position within the clean energy market”. The Regulator submitted that the alleged contraventions by Emerging Energy are serious, and risk compromising the integrity of the Registry. In such circumstances, the Regulator submitted that the fact that Emerging Energy is in liquidation “does not defeat the significant public interest behind the deterrence function”, particularly where the relief sought by the Regulator (namely, declarations of contravention and civil penalties) cannot be obtained by a proof of debt in the liquidation.

38    I accept that there is a public interest in the enforcement of the obligations imposed by regs 33 and 34 of the ANREU Regulations, and the deterrence of conduct in contravention of the statutory scheme established under the ANREU Act. There is serious question to be tried as to whether Emerging Energy contravened those provisions as alleged by the Regulator. The factual and legal issues raised by the proceedings are unlikely to be particularly complex. Both the declaratory relief and the imposition of pecuniary penalties, if ultimately granted, would serve to demonstrate the Court’s disapproval of the contravening conduct and provide an indication as to its seriousness. The purpose of general deterrence is not diminished by the fact that the company is in liquidation and may be unable to pay any penalties imposed.

39    The rights and obligations arising from the alleged contraventions cannot be enforced by the lodgement of a proof of debt, and the relief claimed by the Regulator is not available other than by the continuation of these proceedings: cf. Aurora Community Care at [20] (Abraham J).

40    In considering whether to grant leave to the Regulator to continue these proceedings against Emerging Energy, I initially had some reservations arising from the absence of a contradictor with an interest in defending the proceedings.

41    In some other cases in which a regulator has been granted leave to continue civil penalty proceedings against a company in liquidation, there are other respondents (such as individuals who are alleged to have been involved in the contraventions) who can take an active role in contesting (or admitting) the substantive allegations raised in the proceedings: see e.g. Irabina Autism Services at [5]–[6], [30] (Horan J); Artorios Ink at [5], [10] (Mortimer J); Foot & Thai Massage at [41]–[42] (Katzmann J). In other cases, the company might continue to participate in the proceeding through its liquidators, although this may have implications for other factors relevant to the grant of leave, such as the potential impact of the costs incurred by the liquidators on the interests of unsecured creditors of the company: compare Australian Institute of Professional Education at [44], [47].

42    In the present case, the proceedings have been dismissed as against Mr Shaikh. While the liquidators of Emerging Energy neither consent to nor oppose the Regulator’s application for leave under s 500(2) of the Corporations Act, they do not intend to take an active role in the substantive proceedings and seek to be excused from appearing at the hearing. Pleadings have been filed by the parties, and the Regulator proposes to rely on admissions contained in the defence that was filed by Emerging Energy before it entered into liquidation. Nevertheless, the proceedings are not at an advanced stage, and it will remain necessary for evidence to be filed in support of the Regulator’s claims and for findings of fact to be made based on that evidence. Legal questions may arise in relation to the application of the relevant provisions of the ANREU Regulations to the facts as found by the Court. If the claims are established, it will be necessary for the Court to determine the appropriate penalties.

43    It is not uncommon for civil penalty proceedings to be resolved by agreement between the parties. The facts on which liability depends may be agreed, and the parties may make joint submissions on liability and relief. In such circumstances, the role of the Court is to determine whether the agreed penalty is within an appropriate or permissible range: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [57]–[58] (French CJ, Kiefel, Bell, Nettle and Gordon JJ); see e.g. E Connect Solar at [2], [33]–[40], [94]–[98] (Derrington J).

44    On the other hand, if leave is granted to continue this proceeding against Emerging Energy, it is not envisaged that matter will be resolved by consent, nor that the Regulator will endeavour to reach agreement with the company as to liability or relief. Rather, the matter will proceed on an ex parte basis, with the Regulator adducing evidence and making submissions as to the findings that should be made by the Court, and the relief that should be granted.

45    Despite my initial reservations, I have concluded that it is appropriate to grant leave to the Regulator to continue the proceedings against Emerging Energy. The position will be similar in some respects to circumstances in which a respondent does not appear to defend proceedings brought against it. The Court will still be able to determine the issues on the pleadings, after having regard to any evidence and considering the submissions made by the Regulator. In the event that any issue of fact or law arises on which the Court requires further assistance, consideration might be given to the possible appointment of an amicus curiae in the proceedings. That possibility can be addressed if and when it becomes necessary to do so. On balance, I consider that the public interest considerations discussed above (at [38]) outweigh any potential difficulties that might be presented in hearing the proceedings without any active participation on behalf of Emerging Energy, and in the absence of any other respondent.

46    Finally, I note the terms of the undertaking that has been provided by the Regulator, which is relevant in ameliorating any potential prejudice to creditors of Emerging Energy: cf. E Connect Solar at [17(g)] (Derrington J); Aurora Community Care at [21] (Abraham J). In particular, the Regulator has given an undertaking not to enforce any civil penalty order against Emerging Energy without obtaining the leave of the Court. This is less specific than the undertaking given in Irabina Autism Services by the Commissioner of the NDIS Quality and Safeguards Commission, that is, an undertaking not to enforce any pecuniary penalty or costs against the company unless its liquidator declared a surplus of assets in excess of creditor liabilities. However, it is sufficient that the Regulator will not be able to enforce the payment of any pecuniary penalties imposed on Emerging Energy without leave, at which time the Court can consider and address the impact of any such penalties on other creditors of the company before such leave is granted: see Australian Competition and Consumer Commission v Quantum Housing Group Pty Ltd [2020] FCA 474 at [9] (Colvin J). While the Regulator’s undertaking in the present case does not specifically address costs, similar considerations would arise in the exercise by the Court of the discretion to order costs against Emerging Energy.

47    Accordingly, the Regulator is granted leave under s 500(2) of the Corporations Act to proceed against Emerging Energy, and to file and serve an amended originating application and amended statement of claim.

Associate:

Dated:    23 January 2026