Mining magnate turned federal MP Clive Palmer has prevailed in a legal battle with a Chinese state-owned mining partner who accused him of fraudulently siphoning $12m from a joint iron ore venture.
Queensland’s supreme court on Monday threw out a lawsuit by Citic Pacific subsidiaries which alleged Palmer breached the companies’ trust when drawing on funds to manage a related port in Western Australia.
Justice David Jackson dismissed the claim on Monday after ruling that $12.1m that Palmer withdrew from a bank account controlled by his company Mineralogy in 2013 was not held in trust.
The money went in two cheques to other Palmer companies, including $2.1m to Media Circus, which bankrolled the Palmer United party’s 2013 federal election campaign.
Citic’s lawyers said its subsidiaries had paid the money for the explicit purpose of running the port. Palmer countered by saying it was his company’s money to do as he saw fit.
Jackson noted a “curious feature of the case” was that Mineralogy paid the Citic companies $12.1m on account of the payment dispute shortly before a January court hearing – but neither party told the court at the time.
The Citic companies continued to press their claim in case they were entitled to interest or a share of any profits Palmer or Mineralogy made from the money.
Palmer on Twitter welcomed the ruling: “Citic’s claims dismissed. Nothing but total fabrication.”
He also criticised media coverage of the case and Citic’s “low act” in aiding it.
“Citic new I couldn’t comment under the contract, but still forced propaganda on to journalists to ask question,” he said.
Citic new I couldn't comment under the contract, but still forced propaganda on to journalists to ask questions. A low act by Citic.
— Clive Palmer (@CliveFPalmer) May 4, 2015
Palmer then said: “The Australian government needs to stand up for Australian companies being exploited by overseas-owned enterprises.”
While the allegations he had acted dishonestly were irrelevant since the money was not held in trust, Palmer’s conduct was questioned by Jackson, who defended his opponents’ choice to raise fraud allegations against him.
Jackson said there was evidence to conclude that the federal MP knew he had broken Mineralogy’s “promises to pay only the authorised costs and reimbursements” under its agreement to run the port.
Jackson also found the Citic companies had a “reasonable basis” for alleging that Palmer, probably in May 2014, “falsely manufactured a document” to attempt to explain his transfer of the money.
