Question

Terry was an employee of Cosmo Mining Services Pty Ltd (CMS). CMS is a subsidiary of Cosmo
Mine Ltd (CM) as CM owns 120 of the 200 issued shares in CMS. CMS owns and operates a
lead, zinc and copper mine at Gunbarrel, Western Queensland. CM has an arrangement with
the New Vision Bank Ltd whereby it leases all of the mining equipment and then subleases
the equipment to CMS which pays CM a leasing charge per annum equal to the bank’s leasing
costs plus 10 per cent.
Recently, CMS has attracted considerable media attention as scientists have discovered that
CMS’s mining activities have contaminated a nearby river which supplies the water to the
2
mine and Gunbarrel. A number of Gunbarrel residents and former employees, including Terry,
have contracted cancer because they drank the contaminated water. The CMS shareholders
call a general meeting for the purpose of addressing CMS’s potential liability to its employees
(current and former) as well as the residents of Gunbarrel. The CMS shareholders
unanimously vote in favour of selling CMS’s business to a newly formed company, Lazarus Pty
Ltd, and winding up of CMS. Advise Terry if he can take action against Lazarus Pty Ltd, CMS
and/or CM.

Answer 1

Enforcing environmental laws is a central part of EPA's Strategic Plan to protect human health and the environment. EPA works to ensure compliance with environmental requirements. When warranted, EPA will take civil or criminal enforcement action against violators of environmental laws. Learn more about our enforcement goals.

In given case :

CM owned 120 shred out of 200 that is 60%, it is a clear indication of dominance and controlling interest over the business decision in the company .

Though unanimously votes casted in favour of selling CMS’s business to a newly formed company, Lazarus PtyLtd, and winding up of CMS

Still Terry can take action against CMS and aslo against to lazarus pty let,

Responsibility of management :

• finding the companies or persons responsible for the contamination
• negotiating with them to perform the clean up themselves, or
• ordering them to perform the clean up, or
• to have them pay for the clean up performed by another party or EPA.

Enforcement for non compliance or violation :

Civil Administrative Actions are non-judicial enforcement actions taken by EPA or a state under its own authority. These actions do not involve a judicial court process. An administrative action by EPA or a state agency may be in the form of:

• a notice of violation or a Superfund notice letter, or
• an order (either with or without penalties) directing an individual, a business, or other entity to take action to come into compliance, or to clean up a site.

Civil Judicial Actions are formal lawsuits. They are filed in court, against persons or entities that have failed to:

• comply with statutory or regulatory requirements,
• comply with an administrative order,
• pay EPA the costs for cleaning up a Superfund site or commit to doing the cleanup work.

Criminal Actions can occur when EPA or a state enforce against a company or person through a criminal action. Criminal actions are usually reserved for the most serious violations, those that are willful, or knowingly committed. A court conviction can result in fines or imprisonment.

We can conclude that Terry has all rights to sue on transferring company and transferor compay and management there of (CM).