Diamond Joe hopes of Tasmanian mining windfall slipping away amid legal stoush
Joe Gutnick is going head to head with mining company Moina Gold over claims he failed to pay $500,000 to keep up his end of the bargain.
“Diamond” Joe Gutnick has denied he breached a contract over a mining exploration licence in Tasmania, amid a brewing legal fight in the federal court.
Mining Company Moina Gold is suing Mr Gutnick for $500,000 and has asked for a declaration that he has no legal or equitable interest in the project and that their contract was terminated in 2020.
A mediation meeting took place on Thursday, and a brief administrative hearing occurred on Friday when the mining company’s legal counsel, Chris Gunson, SC, and Mr Gutnick’s lawyer, Chris Groves, discussed an issue about documents subject to legal professional privilege.
Mr Gutnick has previously revealed to The Australian he hoped a new mining lease in Tasmania could lead to a multibillion-dollar, 20-plus year mineral windfall which could support a new AFL team in the state.
He denied the allegations made against him in the proceeding before the Federal Court in a statement supplied by his lawyers.
“(Mr Gutnick) is pursuing his own cross-claim seeking to enforce the agreement. The Court proceeding has nothing to do with Mr Gutnick’s other activities in Tasmania,” he said.
According to documents lodged with the Federal Court by the company, Mr Gutnick failed to carry out any of the exploration works he promised set out in contracts relating to extensions of exploration licences in the state’s mid North West in Cethana, River Lea and Narrawa Creek.
They included drilling two holes at Bell Mount, drilling one hole at Sayers and drilling one hole at Round Mountain.
The originating application also says he failed to conduct diamond drilling in River Lea and did not contribute any “amount towards the costs of exploration”, which amounted to $500,000.
“As a consequence of the respondent’s breach of the contract … by email dated 12 March 2020 from Ian Guest & Associates to Rae and Partners, the applicant terminated the contract,” the statement of claim states.
Mr Gutnick is accused of engaging in misleading or deceptive conduct as well, after he lodged “caveats” with the registrar of mines to forbid the “approval of any transfer or other dealing” relating to the exploration licences.
He did so in November 2020, after the company tore up their contract in March. The documents say the company granted Mr Gutnick the right to explore the mineral tenements in 2020, and he was also granted an option to purchase an 80 per cent interest in the mineral tenements at “any time” during the exploration period.
But Mr Gutnick “did not validly exercise the option” at all, and the company is now asking for their promised $500,000, according to the originating application.
“(Moina Gold Pty Ltd is seeking) a declaration that the respondent has no legal or equitable interest arising out of or in connection with the contract,” it reads.
“(and) a mandatory injunction that … (Mr Gutnick) do all things necessary to withdraw or cause to be removed the caveats.”
In a cross-claim, Mr Gutnick denies most of the company’s arguments and says the expiration of his option period has not yet occurred and denied a due diligence period expired on or about October 7, 2019.
He says the company failed to open a joint expense account and did not form a company to hold mineral tenements as agreed.
“By reason of there being no expense account, the respondent was unable to make any payments in contribution to the costs of exploration,” his cross-claim states. He also said he paid $125,000 to the company in 2019, he is not liable to pay the company $500,000 exploration costs and is seeking a declaration a contract with Moina Gold Pty Ltd has not lapsed as “worthless”.
Hearings are scheduled for late October in the matter.
Mr Gutnick was declared bankrupt in 2016 and has been probed by ASIC about past company loans.
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