Clive Palmer misses $1.3m Citic payment, applies to overturn ruling

Federal MP Clive Palmer has failed to pay a $1.3m court order, more than a year after it was handed down.

Federal MP Clive Palmer has ­failed to pay a $1.3 million court order, more than a year after it was handed down by the WA Supreme Court.

Lawyers representing Mr Palmer’s private company, Mineralogy, will today apply to the WA Supreme Court for the 14-month-old decision to be overturned in an attempt to get Mineralogy out of making the payment.

Then-Supreme Court judge James Edelman last year ordered Mineralogy to pay its estranged Chinese business partner Citic $1.3m in costs to cover the time it spent preparing to defend a claim brought against it — but ultimately abandoned — by Mineralogy.

Citic and Mineralogy have been fighting each other on various legal fronts for years as they seek to ­resolve numerous contractual disputes over the Sino Iron project in Western Australia’s Pilbara.

Citic has spent an estimated $16 billion building the mine on ground originally held by ­Mineralogy, and the relationship between the two groups has disintegrated since Citic’s original decision to pay Mr Palmer $US415m for the rights to the project.

Mineralogy had been pursuing a claim against Citic that a key contract between the two had been frustrated, but it withdrew the claim for frustration in April last year, leaving work done on the defence by Citic to go to waste.

At the time, Justice Edelman found Citic’s solicitors had spent 2565 hours working on their ­response to the frustration claim.

In his judgment, he identified elements of Mineralogy’s ­approach as “unreasonable”.

“The conduct of Mineralogy leading to the withdrawal of its frustration claim was so unreasonable that an award of ­indemnity costs should be made,” Justice Edelman said.

During his original ruling, ­Justice Edelman noted that Mineralogy had altered its pleading on eight different occasions in a 16-month period from March 2013 to July last year, and had continued to make changes even after the judge had moved to restrict Mineralogy from making further amendments to its case.

The various pleadings all ­revolve around the dispute ­between Citic and Mineralogy over the so-called Royalty B payment, which is potentially worth hundreds of millions of dollars to Mr Palmer. The royalty was to be calcu­lated using iron ore pricing mechanisms that no longer exist, which has led to an ongoing fight between the pair over how or if any royalty should be paid.

Mineralogy’s efforts to have the cost order overturned today will centre on the fact that Citic has since raised the prospect of frustration as an alternative position should its primary arguments in the case fail.

Mineralogy’s resistance to paying the costs order comes as Mr Palmer’s key businesses face ­several challenges.