Clive Palmer ordered to pay $102 million to Queensland Nickel liquidators

Billionaire businessman and former federal MP Clive Palmer has been ordered by a Queensland court to repay more than $100 million in loans to the liquidators in charge of one of his companies.

The Supreme Court ordered Palmer’s company Mineralogy repay the money to Queensland Nickel, which collapsed under Palmer’s ownership in 2016 and left hundreds without a job.

Clive Palmer at the Federal Court in Brisbane in 2016 to answer questions regarding the fall of Queensland Nickel.Credit: Bradley Kanaris

The Queensland Nickel liquidators appealed a decision of Supreme Court Justice Debra Mullins on June 3 last year, which dismissed their claim to retrieve the money from Mineralogy.

Their case was reviewed by Queensland’s Court of Appeal and appeal justices Hugh Fraser, Justice Philip Morrison and Justice Martin Burns ruled in favour of the liquidators on Friday.

The liquidators argued Justice Mullins wrongly ruled the money in the account was held on a bare trust and payment by Queensland Nickel to Mineralogy collapsed the trust.

They also argued Justice Mullins incorrectly identified who the parties were to the loan agreement.

The background was that before it went into liquidation, Queensland Nickel made payments totalling more than $102 million out of its bank account to, or for the benefit of, Mineralogy.

Clive Palmer’s Queensland Nickel refinery, about 25 kilometres north-west of Townsville.Credit: Michael Chambers

Those payments were recorded in an account described as the “Mineralogy Loan Account”.

The liquidators’ claim was for the recovery of that money was made on the basis that it was paid by way of loan and was repayable with interest.

On Friday, appeal justices Fraser, Morrison and Burns overturned Justice Mullins’ decision and ordered Palmer’s company Mineralogy to repay the total of the loans – $102,884,346.26.

“The learned primary judge found that the loan to Mineralogy was made by the joint-venture companies (JVCs),” the Court of Appeal justices ruled.

“Her Honour held that to be so because doing so was a means of disbursing the funds to the JVCs’ ultimate owner [Mineralogy] in a tax effective way.

“In doing so the learned primary judge did not bring to account the evidence ... [that] compelled the inference that the loan agreement was between [Queensland Nickel] as trustee and Mineralogy.

“Not only had loan funds been distributed to Mineralogy before the first forgiveness agreement, Mineralogy had paid off part of the loan before that time as well.

“The conclusion that the loans were made by the JVCs to Mineralogy cannot be sustained. They were made by [Queensland Nickel] as trustee and [Queensland Nickel] is entitled to have them repaid.”

Queensland Nickel liquidator John Park said in a statement that the funds would be put towards priority costs, employees and remaining unsecured creditor claims.

“This is a great outcome for creditors of [Queensland Nickel]. After five long years of formal proceedings, we hope today’s decision will put an end to this matter and we can proceed to finalise payments to creditors and finalise a long and complicated liquidation,” he said.

Mr Palmer has been contacted for comment.