Iron ore miner Murchison Metals and explorer Chameleon Mining have once again both claimed a win in their long-running legal dispute.
Iron ore miner Murchison Metals and explorer Chameleon Mining have once again both claimed a win in their long-running legal dispute.
Murchison said orders handed down today in the Federal Court confirmed its undersatnding of a judgement originally handed down on 20 October,.
It said the original judgement dismissed Chameleon's claim that it was entitled to an interest in either the Jack Hills project in the Mid West or Murchison's shares in its mining subsidiary Crosslands Resources.
Murchison also acknowledged it is liable to make a number of payments to Chameleon.
Chameleon said the Court orders will crystalise the liability of Murchison and Philip Grimaldi.
"The orders will confirm Chameleon's claim that both Murchison and Grimaldi obtained funds from Chameleon in breach of their respective fiduciary duties or wioth knowledge of such breaches and used those funds in the acquisition of the Iron Jack project," Chameleon said in its statement.
Both companies said they expect the other will be liable to pay costs.
A Murchison statement is pasted bwlow:
CHAMELEON LITIGATION UPDATE
Murchison Metals Limited (Murchison) is pleased to provide an update on the Federal Court proceedings brought by Chameleon Mining against Murchison, Crosslands Resources Ltd ("Crosslands") and others.
In his judgment handed down on 20 October 2010, Justice Jacobsen dismissed Chameleon's claim that it was entitled to an interest in either the Jack Hills iron ore project in Western Australia owned by Crosslands and / or Murchison's shares in Crosslands.
The parties returned to Court on 15 December 2010 for the Judge to make final orders to reflect his reasons for decision. The orders have now been finalised and Murchison expects they will be formally entered later today.
As between Murchison / Crosslands and Chameleon the orders that will be made by the Court reflect Murchison's previously announced understanding of the decision. The effect of the orders is that:
1. There is no constructive trust over the Jack Hills iron ore project or Murchison's shares in Crosslands.
2. Murchison is liable to pay Chameleon a portion of the profit it received as a consequence of the investment of $277,840 in Crosslands from 24 July 2004 to the present time. Murchison notes that it has not been paid any dividends as a consequence of its investment in Crosslands.
As an alternative, Chameleon is entitled, at its election, to equitable compensation of $277,840 from Murchison plus interest at commercial rates on a compounding basis.
3. Crosslands is liable to pay Chameleon the profit obtained by it from the use of $152,750 on the same basis as Murchison. Murchison notes that the project operated at a loss over the relevant period.
As an alternative, Chameleon is entitled, at its election, to equitable compensation of $152,750 from Crosslands plus interest at commercial rates on a compounding basis.
4. Murchison is not liable to pay Chameleon for 10 million shares in Murchison received by another defendant in the proceedings or for the profits from the sale of those shares. In this regard, Murchison is pleased that the Court rejected Chameleon's submission that the Court should make an order pursuant to the Corporations Act requiring Murchison to pay Chameleon for the profits received from the sale of these shares.
The Court has fixed 7 April 2011 as the date by which Chameleon must make the election as to its remedy, as referred to in paragraphs 2 and 3 above.
Chameleon has indicated that it intends to appeal from the Court's orders with respect to the relief granted to it as against Murchison / Crosslands and intends to apply to the Court for a stay of the judgment as against Murchison / Crosslands pending the appeal. The Court has indicated that any such application should be filed by 1 February 2011 and heard on 4 February 2011.
Murchison will seek to have Chameleon's foreshadowed appeal dealt with as expeditiously as possible. By agreement, the issue of costs as between Murchison / Crosslands and Chameleon was deferred.
However, as a result of the orders made by the Court, and subject to the appeal which has now been foreshadowed by Chameleon, Murchison expects that Chameleon will ultimately be ordered to pay Murchison's / Crosslands' costs of the proceedings.
