Palmer’s Mineralogy updates claims in CITIC legal battle

Clive Palmer and his company Mineralogy have succeeded their bid to update allegations against subsidiaries of CITIC Pacific Mining, which a Supreme Court judge has described as "grave in nature".

Legal proceedings between Mineralogy and CITIC have been ongoing for about a decade, with Mr Palmer and Mineralogy recently amending their reply pleadings.

Mr Palmer and his company claimed CITIC subsidiaries’, Sino Iron and Korean Steel, failure to pay royalties under contracts signed by the parties over the Sino Iron project caused him a $4.5 billion loss.

The mining magnate claimed the failure to pay royalties led to Mineralogy being unable to fund several entities, diminishing the values of Yabulu Refinery by about $1.8 billion and of Palmer Petroleum by $2.675 billion.

In a judgment delivered yesterday, WA Supreme Court Justice Michael Lundberg said the allegations in the amended replies were serious and grave in nature, including Mineralogy's claim that the CITIC parties' defence was part of a nefarious delaying strategy.

"These matters directly raise concerns that the court's processes were being misused in certain aspects," he said in his judgment.

"The fact the allegations are serious is, of course, not a reason to preclude the claims proceeding to trial."

CITIC had applied for the court to strike out the amended pleading, arguing the new information could prejudice the trial and is an abuse of process, the judgment said.

However, Justice Lundberg dismissed the strike out application and said he was not satisfied Mineralogy’s updated pleading would prejudice or delay a fair trial.

“I am persuaded by the submissions advanced by the Mineralogy Parties, and I accept the central contentions advanced in those submissions, that the pleading under challenge does not raise irrelevant or immaterial issues, and nor does it raise false issues,” he said in his judgment.

In his judgment, Justice Lundberg noted that he was the seventh judge to be invited to scrutinise the pleadings but said he won’t be the last.

“The task of considering these applications brings with it an unusual feeling, perhaps best described as one of judicial déjà vu,” he said.

“I make that introductory observation because the allegations raised by the plaintiffs, and which are contained within the impugned paragraphs of the reply pleadings, have been considered now by six judges of this court on five separate occasions, all to varying degrees.

“On each occasion, over the course of the past three years, the terms of this remarkably versatile and resilient pleading have been largely unchanged although the pleading as it appears before me contain fresh allegations.”

Despite Mineralogy’s success in this matter, another application to halt proceedings until a cross-appeal has been determined was again dismissed by the Supreme Court of WA.

Mineralogy appealed Supreme Court Justice Kenneth Martin’s dismissal of its application to halt proceedings in March.

In a judgment published by the WA Court of Appeal yesterday, justices Andrew Beech and John Vaughan upheld Justice Martin's decision, dismissed Mineralogy’s cross-appeal and ordered the company to pay CITIC’s costs in the proceedings.

“The grant of a stay would cause substantial delay. In both the appeal and the cross-appeal, the respondent's answer is yet to be filed,” the court of appeal said.

“The trial before the primary judge was large and complex. The trial reasons are extensive. It is to be expected that the appeal hearing for this matter will take much longer than most appeal hearings.

“Indeed, counsel for Mineralogy did not dispute an estimate that the appeal and cross-appeal may involve a five-day appeal hearing.

“In all the circumstances, it is likely that the hearing of the appeal and the cross-appeal will not occur before the second half of next year.”