Vibrant mining magnate Clive Palmer’s political ambitions seem like in tatters. However what of his multibillion-dollar authorized ambitions?
On Sunday he introduced his United Australia Get together won’t contest Western Australia’s state election in March – a logical resolution given his social gathering attracted simply 0.6% of the vote within the November election in his residence state of Queensland.
However he has not withdrawn his defamation case within the Federal Courtroom of Australia in opposition to Western Australian premier Mark McGowan, over statements together with feedback about Palmer’s declare for as much as A$30 billion in damages from the WA authorities over a stalled iron ore mission.
The damages declare has to do with the WA authorities imposing situations in 2012 on a proposal by Palmer’s firm Minerology Pty Ltd to develop the Balmoral South Iron Ore mine within the Pilbara. These situations, Palmer’s attorneys have argued, meant Minerology was unable to develop the mine, and thus suffered monetary loss as a result of then being unable to promote the mission to Chinese language pursuits.
In arbitration proceedings Palmer’s attorneys have gained a number of factors of their bid to have these situations declared invalid. The WA authorities was sufficiently apprehensive about its publicity to unexpectedly move, in August 2020, unprecedented “emergency laws” to stop Palmer pursuing damages.
The WA authorities legislated itself a win in its dispute with Clive Palmer — and put itself above the legislation
Palmer has since utilized to Australia’s Excessive Courtroom to have the WA laws declared invalid.
However whether or not the Excessive Courtroom motion goes forward shouldn’t be the bottom-line query. Even when it does hear his case, and declares the WA laws invalid, it’s nonetheless removed from sure Minerology may then go on to win damages.
The ‘first tier’ hurdle: who would purchase from him
The authorized precedent governing Palmer’s declare for damages are contained in a 1994 Excessive Courtroom resolution in Sellars v Adelaide Petroleum. This concerned an attraction by Mark Sellars, a director of mining firm Poseidon Ltd, and Poseidon itself, in opposition to a Federal Courtroom resolution that awarded damages to minerals exploration firm Adelaide Petroleum as a result of losses suffered because of deceptive statements by Poseidon and Sellars.
The Excessive Courtroom dominated in opposition to Sellars and Poseidon. The numerous level within the resolution was the precept the judges defined in making their ruling. A court docket should, with the benefit of hindsight, take a look at the whole lot that befell and ask if it was extra probably than not (in different phrases, if there was a 51% likelihood or extra) that, even when wrongdoing occurred, it led to a misplaced business alternative.
That is the “first tier” to be overcome to get well damages.
Making use of the Sellars v Adelaide Petroleum precept to Palmer’s declare, the problem turns into whether or not, due to the WA governent’s situations, Minerology extra probably than not misplaced the chance to promote the mine to Chinese language pursuits. Extra pointedly, was it extra probably than not Chinese language pursuits would have purchased the mine from Palmer?
Bitter dealings with Chinese language companions
With the advantage of “hindsight”, any court docket would want to think about Palmer’s historical past with Chinese language enterprise companions.
A type of is his lengthy and bitter authorized feud with CITIC Pacific Mining, the highly effective state-owned enterprise that operates the Sino Iron mission, Australia’s largest magnetite iron ore mine, on Minerology-controlled tenements.
In 2014, Palmer accused CITIC of dudding him on royalty funds. CITIC, in flip, accused Palmer of siphoning off funds to pay for his election campaigns. (Palmer gained the Queensland seat of Fairfax on the 2013 federal election, and two UAP candidates, Glenn Lazarus and Jacqui Lambie, gained Senate seats.)
China’s main enterprise publication, Caixin, quoted an unnamed CITIC government as saying Palmer’s try “to swindle cash from us” would “have grave penalties for international traders and particularly Chinese language traders”.
The dispute led to a number of instances in WA’s Supreme Courtroom. A 2017 ruling awarded Minerology A$200 million in again funds, in addition to ongoing royalties then value about A$400 million a yr. (CITIC’s attraction was rejected in 2019). However in 2020 the court docket threw out Minerology’s case for about A$300 million extra from CITIC as an “abuse of course of”.
However simply as damaging to Palmer’s dealings with the Chinese language had been his statements on nationwide tv in August 2014, during which he mentioned the Chinese language authorities needed to “take over our ports and get our sources free of charge”, and referred to as Chinese language officers “bastards” and “mongrels”.
So even when the Excessive Courtroom clears the best way for Minerology to pursue its damages declare in opposition to the Western Australian authorities, there’s an argument to be made that Chinese language pursuits would have been extra probably than to not decline to do enterprise with Palmer.
If that’s the case, Palmer would get well no damages.
The ‘second tier’ hurdle: quantifying the loss
There may be additionally a second-tier hurdle to beat if a court docket decides, for all of the dangerous blood, that Chinese language pursuits would have let bygones be bygones and be ready to take care of Palmer.
In assessing the plaintiff’s precise loss, the court docket might want to contemplate each contingency which may have an effect on that loss. It was held in Sellars v Adelaide Petroleum that to calculate the precise injury, what is named the “diploma of prospects” method have to be utilized.
How Clive Palmer may problem the act designed to cease him getting $30 billion
This method means the court docket should take a look at the value of iron ore on the time the mine would have been prepared on the market, what a possible purchaser could be ready to pay for the mine, and thus what loss has been incurred. This can’t be a exact train; the court docket simply does its greatest.
Nevertheless it’s the primary hurdle that Palmer must recover from first.
So even when he possibilities his arm within the Excessive Courtroom, and wins, he and his attorneys nonetheless have a authorized mountain to climb. Establishing his precise entitlement to damages is prone to show troublesome.
Kenneth Yin doesn’t work for, seek the advice of, personal shares in or obtain funding from any firm or organisation that may profit from this text, and has disclosed no related affiliations past their tutorial appointment.