Clive Palmer wins against Citic Pacific despite ‘sham’ document

A judge found in Clive Palmer’s favour against Citic despite ‘an apparent ­attempt to manufacture evidence’.

Clive Palmer was directly ­involved in the “unexplained ­creation of an apparently false contract” relating to his allegedly fraudulent withdrawals of more than $12 million in Chinese funds, a Supreme Court judge has ruled.

The federal member for Fairfax was part of “an apparent ­attempt to manufacture evidence” to show there was a written contract, which could explain some of his withdrawals of Citic Pacific’s money.

But Queensland Supreme Court judge David Jackson found in Mr Palmer’s favour that there was not a formal legal trust under­pinning a bank account from which the tycoon is alleged to have fraudulently siphoned the funds to bankroll his political party and other private interests. As a result of that finding, Justice Jackson said he had decided it was “not necessary to make a specific finding” of dishonesty about Mr Palmer, as “such findings could cause significant reputational damage” and were not necessary to resolve the liability issues in the civil proceedings.

Justice Jackson found that Mr Palmer knew that a $10m payment he made to his own company, Cosmo Developments, from the Chinese funds “was not an authorised payment”, and that a $2.167m payment made directly to a Brisbane advertising company involved in his electoral campaign, Media Circus, “was not an authorised payment”.

Justice Jackson said that, until November 26 last year, Mr Palmer and Cosmo Developments “had persisted in an apparently unsustainable and possibly deliberately false plea” that the payments were made under an oral contract between the ­tycoon’s companies for port management services.

Mr Palmer tweeted yesterday: “Citic’s claims dismissed. Nothing but total fabrication.”

He added: “Australian government needs to stand up for ­Australian companies being ­exploited by overseas owned ­enterprises.”

Justice Jackson said the allegations of fraudulent conduct levelled against Mr Palmer had a reasonable basis for being made, but it had “not been necessary to decide some of them”.

The finding by Justice Jackson that there was not a trust meant the civil proceedings brought in Queensland by the Chinese ­government-owned investment company Citic Pacific would not result in findings about whether the MP had acted dishonestly and fraudulently.

Justice Jackson found that contributions of more than $20m made by the Chinese to a National Australia Bank account controlled by Mr Palmer for the purposes of running a port “were not held on trust”.

Mr Palmer’s use of the funds for his own purposes, his ­attempted explanations and his production of an alleged “sham document” to justify the payments were partly dealt with in the findings.

“His allegation and withdrawal of the allegation that there was a contractual basis for the payments or that they were made for port management services are completely unexplained,’’ the judge stated.

Justice Jackson rejected the Palmer legal team’s argument that the Chinese side acted ­improperly in alleging that the politician had falsely manufactured the “Port Management Services Agreement”.

Mr Palmer’s lawyers argued that they did not seek to genuinely use the document in the court proceedings. Justice Jackson found “the unexplained creation of an apparently false contract of that kind was always relevant to the (Chinese) case”.

The case brought against the Palmer United Party leader sought formal orders including that he dishonestly procured the funds, $10m of which was funnelled into the PUP during the 2013 federal election campaign.

Fraud squad detectives in Western Australia and Queensland have been investigating the allegations since a formal complaint was authorised in Beijing and lodged late last year. Mr Palmer denies any wrongdoing.

A Citic Pacific spokesman said: “Our view remains that the use of this money to bankroll Mr Palmer’s political ambitions and other business interests was inappropriate and unauthorised.

“We will carefully study the decision, which turns on the ­technical legal question of ­whether contributions to the ­administrative fund were held on trust or not.”