Judge slams Clive Palmer’s Mineralogy over ‘abuse of process’

Mineralogy engaged in an ‘abuse of process’ over its $10bn claim against Citic, the WA Supreme Court has found.

Clive Palmer in parliament last week.

Clive Palmer’s private company Mineralogy engaged in an “abuse of process” when it launched a $10 billion legal claim against China’s Citic, the West Australian Supreme Court has found.

In a ruling handed down late on Friday, judge John Chaney permanently stayed two legal ­actions launched by Mr Palmer this year and slammed Mineral­ogy for attempting to circumvent the role of the court.

Mr Palmer, the MP for the Queensland Sunshine Coast seat of Fairfax and founder of the Palmer United Party, announced the launch of the claims seeking $10bn in damages from Citic amid a blaze of publicity earlier this year.

Justice Chaney found that the two new claims overlapped with an existing ongoing matter between Mineralogy and Citic, and instead had been designed to get around court-imposed rules restrict­ing how Mineralogy could make changes to one of its legal cases.

“In the absence of any satisfactory explanation, the commencement of two additional actions to litigate issue which are already raised in, or where a complete remedy is available in, and existing extant action, is vexatious and an abuse of process,” Justice Chaney wrote in his judgment.

“In this case the explanation for separate actions is to circumvent procedural requirements ... (Mineralogy’s) unilateral assumption that those procedural ­requirements will ultimately be resolved in its favour is not a justification for that circumvention.”

The latest setback for Mr Palmer comes before a potentially critical week for the federal MP. His lawyer, Simon Couper QC, told the West Australian Supreme Court last week that Mineralogy faced a “drop-dead date” at the end of this week and urgently needed a trial into a new matter in which Mineralogy is seeking an interim cash payment from Citic. With Mr Palmer’s other commercial ventures all appearing to be struggling to make money, there are concerns about the financial health of his business empire.

Mineralogy and Citic are embroiled in a series of legal disputes relating to their unhappy partnership over the Sino Iron mine in Western Australia. Citic paid Mr Palmer $US415 million in 2006 for the rights to mine at Sino Iron and has spent about $12bn developing the mine, which has been significantly more costly and far less productive than expected.

While the decision is a significant setback for Mr Palmer’s $10bn claim, the matter is not dead in the water. Justice Chaney noted Mineralogy still had the opportunity to apply to the court for leave to amend its claim in its long-running legal battle over the so-called Royalty B payment. The Supreme Court ruled last year that Mineralogy could not adjust its case in the Royalty B dispute without leave from the court, after Mineralogy made eight amendments in just 16 months.

The Royalty B from Sino Iron is potentially worth tens, if not hundreds, of millions of dollars a year to Mr Palmer but it has been stuck in the courts after the international iron ore price benchmark used to calculate the royalty was scrapped.