Clive Palmer’s companies take control of $137.5m lawsuit

Clive Palmer’s companies have taken control of a $137.5m lawsuit launched by his cash-strapped Queensland Nickel.

Clive Palmer at Parliament House in Canberra. Picture: Kym Smith

Clive Palmer’s companies have taken control of a $137.5 million lawsuit launched by his cash-strapped Queensland Nickel, ­exposing the resources magnate to potentially costly legal bills and sparking criticism from sacked refinery workers.

Queensland Supreme Court judge David Jackson yesterday was scathing of Mr Palmer’s lawyers for dragging their feet on the matter, saying that the behaviour was “ridiculous”, after Townsville refin­ery owners QNI Resources and QNI Metals successfully ­applied to substitute themselves as plaintiff for the under-administration Queensland Nickel.

The move prevents voluntary administrators FTI Consulting from potentially killing the lawsuit if they decided it was doomed to fail and a waste of money for the company, which owes more than $100m to unsecured creditors and more than $70m in ­entitlements to workers.

In August last year, Queensland Nickel sued Mr Palmer’s ­estranged Chinese business partner CITIC over a separate West Australian resources project. It sought $137.5m in damages for “unconscionable conduct”.

In January, Queensland ­Nickel fell into administration, and FTI began reassessing all of the company’s litigation. Justice Jackson is considering a strike-out application by the Chinese parties, which argue the refinery is a “third party outside the universe of … the CITIC companies and (Mr Palmer’s flagship company) Mineralogy”.

If successful, Mr Palmer’s companies could be slugged with huge court courts. However, if the Palmer companies win the overall lawsuit they could be awarded damages of up to $137.5m.

Australian Workers Union state secretary Ben Swan, who represents many of the 787 sacked refinery workers, said Mr Palmer and his companies should change their priorities.

“Their focus would be better placed on ensuring as much harm is minimised for the 800 workers who have lost their jobs,’’ he said.

“If that means altering their legal strategy and redeploying ­resources to look after workers ... we would hope they would make a fair assessment for the benefit of workers, but it doesn’t appear they’ve done that.”

Mr Palmer this week said that the refinery would likely not reopen until July 31, meaning ex-workers’ redundancy entitle­ments would not be paid by him, but by the taxpayer under the federal government’s Fair Entitlements Guarantee scheme.

Townsville-based federal MP Ewen Jones used parliamentary privilege to launch an attack on Mr Palmer late on Tuesday, ­accusing him of illegal phoenix activity and urging the corporate watchdog to investigate.

“If a casual observer looked at what has happened here, they would not be able to see any discernible difference between the illegal and unprincipled act of phoenixing a company and what the member for Fairfax and his management of this Townsville company have done,” he said.

Mr Jones also accused Mr Palmer of deliberately “not paying creditors, and abusing staff and their entitlements”.

Mr Palmer did not answer questions from The Australian.