Double blow for Clive Palmer in legal onslaught

CLIVE Palmer has suffered a ­disastrous day in his multi-pronged legal war with Chinese corporate giant Citic Pacific.

Clive Palmer had a bad day in court yesterday. Picture: Jono Searle

CLIVE Palmer has suffered a ­disastrous day in his multi-pronged legal war with Chinese corporate giant Citic Pacific, with judges in two states ruling against attempts by his flagship company to take control of a key iron ore port in Western Australia’s Pilbara region.

Mr Palmer suggested on the ABC’s Q&A on Monday that he had won a series of recent legal judgments over Citic, describing his estranged business partner as “Chinese mongrels”.

In Sydney yesterday, the full bench of the Federal Court overturned a ruling in February that designated Mr Palmer’s vehicle, Mineralogy, as port operator for maritime security purposes at Cape Preston, a key infrastructure component of the $10 billion Sino Iron project. The state-owned Citic’s successful appeal means the federal Department of Infrastructure will decide on a new port operator at Cape Preston, which Citic has been using to export iron ore since December. When Mr Palmer won the first round of the port battle in February, he said: “I predict this will be the first of many judgments to come our way in the next 12 months.”

IN DEPTH: Clive Palmer

In a separate case in Perth, the Federal Court threw out Mineralogy’s application to become the security operator of Cape Preston’s facilities — a smaller area that includes buildings, installations and equipment used in connection with ship loading. Mineralogy was ordered to pay Citic’s costs for both cases, adding to a $1 million-plus legal bill that Mr Palmer sustained in a separate loss in the West Australian Sup­reme Court this month. In that case, judge James Edelman described Mineralogy’s courtroom tactics in its fight with Citic over royalties from the Sino Iron project as “absurd” and “unreasonable”.

Mineralogy’s law firm in both of yesterday’s cases was HopgoodGanim, which was named one of the biggest recipients from more than $12m in Chinese funds allegedly wrongfully siphoned by Mr Palmer from a bank account set up for expenses at Cape Preston.

The Australian revealed in June that Federal Court documents showed HopgoodGanim was paid more than $450,000, with cheques drawn on the bank account between March and December last year for legal costs related to disputes with Citic Pacific.

In a third case, before the Queensland Supreme Court yesterday, Mr Palmer argued a legal attack on him by Citic was an abuse of process driven by a desire to destroy his reputation. Citic subsidiary Sino Iron is suing Mr Palmer for $10m, alleging he knew of his company’s allegedly fraudulent and dishonest misuse of the $12m.

Mr Palmer’s barrister, Thomas Bradley QC, told the court Sino Iron’s claim was “founded on fiction” and was improperly claiming financial relief from Mr Palmer when there was no allegation he had personally received a benefit from the allegedly misused funds. Mr Palmer and his companies have denied any wrongdoing.

At Mr Palmer’s request, the judge ordered that none of the affidavits and supporting exhibits be released to media and other third parties until another legal argument next week.

In the Federal Court in Sydney, judge Robert Buchanan said the court had found in favour of Sino Iron, after its lawyers argued Mineralogy should not have been granted federal government approval to control the port as it failed to meet a string of key requirements.

Mineralogy lawyer James Peters SC rejected claims the company had been improperly appointed to run the port and said it had the “blessing of the state” to do so. In January last year, the Infrastructure Department announced Mineralogy would be the operator “for the security regulated port of Cape Preston”, but reversed that decision.

Sino Iron sued to gain control of the port but in February the Federal Court ruled in favour of Mineralogy. Sino Iron appealed and, yesterday, the court ruled the orders in February be set aside and that Mineralogy pay Sino Iron’s legal costs.

Earlier, in Perth, judge Neil McKerracher ruled against Mineralogy’s application to become the security operator for the facilities at Cape Preston. “Mineralogy’s complaints cannot be sustained,” he said. Citic said yesterday it was pleased the court had found in its favour in both cases. Mr Palmer could not be reached for comment.

Additional reporting: Sarah Elks