Judge rejects Clive Palmer’s halt bid — now for the case

THE judge who will rule on claims that Clive Palmer acted dishonestly by using $12m of China’s money has thrown out the legal bid to stop the case.

THE judge who will rule on claims that Clive Palmer acted dishonestly by using $12 million of China’s money to bankroll his political party and his private company has thrown out the ­tycoon’s legal bid to stop the case.

Queensland Supreme Court judge David Jackson, in an 18-page judgment in Brisbane yesterday, said a legal action brought by a Chinese state-owned company was not improper, and there was “nothing fictitious” in the ­evidence.

Justice Jackson, who reviewed many documents relating to the case, including bank statements and once-confidential evidence, said Mr Palmer on August 5 last year “drew a cheque on the bank account for the sum of $10m”, payable to his own company, Cosmo Developments Pty Ltd.

Mr Palmer controlled the ­National Australia Bank account called Port Palmer Operations and holding $23m deposited by Chinese company Citic ­Pacific for costs in the operation of a remote port for iron ore ­exports. It had a balance of $12,117,638 at the time of the $10m withdrawal.

Justice Jackson said: “On September 2, 2013, the first defendant (Mr Palmer) drew a cheque on the bank account for the sum of $2,167.065.60 payable to Media Circus Network Pty Ltd.”

The two large withdrawals in the lead-up to the September 7 federal election, in which Media Circus Network managed the costly advertising campaign for the leader of the Palmer United Party, are at the heart of a ­Supreme Court “breach of trust” case in which China’s overseas investment vehicle, Citic Pacific, ­accuses Mr Palmer of dishonesty and fraud. Mr Palmer, who has strenuously denied any wrong­doing and insisted that the funds were his to use as he saw fit, brought his own case against Citic, alleging that its allegations were an “abuse of process”, groundless, designed to embarrass him, and had no prospect of succeeding.

“The defendants submit that the proceeding is brought on a feigned issue, so as to conceal its true nature, which is for the purpose of ‘showing up’ the defendants,” Justice Jackson stated in his ruling yesterday.

“In my view, there is nothing fictitious about the causes of ­action pleaded in the claim and statement of claimed filed by the (Chinese side) in the present case.”

Justice Jackson said “there may be a question” whether compromise and settlement offers by Mr Palmer’s flagship company, Mineralogy, should have been ­accepted prior to the legal action being launched, adding “but that is a different question”.

Justice Jackson said that while Mineralogy offered a compromise, the Citic companies which had deposited the money “were not obliged to accept that outcome and it was not a remedy for the breaches of trust alleged…”

“In my view, even if the inference were drawn that (Citic) seek to use the proceedings to embarrass the defendants, there is no reason to think that (they) do not also desire to proceed to judgment … or that they do not have a prima facie case.” Mr Palmer and his company “may be liable” if the funds in the bank account were dealt with in breach of trust, which is the case that will be heard by Justice Jackson in a Supreme Court trial next month.

Mr Palmer’s lawyers argued that Mineralogy “proffered payment of sums at least equivalent to those sought to be recovered”; that the Citic companies refused to accept the money offered; and the media was being alerted to the proceedings to “show up” the federal member for Fairfax.

Justice Jackson ruled that for Mr Palmer’s legal argument to succeed, it would need to prove that the Chinese side’s action “was started or continued for the purpose of embarrassing” the tycoon, and that it was improper.

He rejected this notion, and stated: “I do not find that it was the predominant purpose (of the Citic companies) to embarrass the defendants. Accordingly, in my view, the proceeding should not be stayed on the ground that it is an abuse of process because it is brought for a collateral and improper purpose. I also do not find that the plaintiffs did alert the media.”

Of the many bitter legal disputes between Mr Palmer and the Citic companies the dishonesty claims over the two large withdrawals are the most serious.