WEST Australian Supreme Court judge has launched an unusually blunt attack on Clive Palmer’s mining vehicle Mineralogy, describing its legal tactics as “unreasonable”, “absurd” and “a moveable feast” as he made a rare order for the company to pay indemnity costs.
In a scathing decision published today, Justice James Edelman ordered Mineralogy to pay the “not insignificant” costs of its estranged business partner, Chinese company Citic Pacific, over a legal claim it launched late last year but abandoned after just four months.
The so-called frustration claim was made as part of Mr Palmer’s wider legal battle with Citic Pacific over the $10 billion Sino Iron project in the Pilbara.
Justice Edelman agreed with Citic that its costs in defending the claim should be paid by Mr Palmer’s company on an indemnity basis, which means Citic can now claim almost all of the legal fees it incurred rather than the usual party costs.
The costs ruling — which is rarely made in the middle of legal proceedings — means Mineralogy will face a hefty bill for its decision to abandon its stance on how a royalty formula for Sino Iron should be calculated.
Justice Edelman said Citic’s lawyers had spent thousands of hours over four months working on Mineralogy’s frustration claim.
“Given the considerable difficulty, and the extreme importance of the frustration issues, coupled with the urgency professed by Mineralogy in moving this matter to a hearing, it is unsurprising that the Citic parties devoted vast time, energy and resources into investigating, researching, and responding to this claim over several months,” he said.
“Prior to Mineralogy abandoning its frustration claim in April 2014 the solicitors for the Citic parties spent 2,565 hours working on matters relating to the frustration claim.”
The judge also repeated his earlier criticism of the “absurdity” that Mineralogy’s application for its frustration claim could be tried within nine days of being pleaded, which he today described as unreasonable.
He also described Mineralogy’s numerous applications to amend its original statement of claim as “a moveable feast’, noting it had pleaded, amended or proposed changes to its pleading on eight occasions since March last year.
“Mineralogy’s numerous, and sometimes very significant, changes to its case have slowed these proceedings down dramatically,” he said.
“There will soon come a point, if it has not already been reached, when a line must be drawn so that the defendants [Citic] can be clear on the detail of the case which they have to answer.”
In his judgment, Justice Edelman also criticised the conduct of lawyers for both Mineralogy and Citic over the way the case had been prosecuted.
He said one side had alleged in correspondence that its opponents had breached their ethical professional obligations.
“The need for civility, from all participants in the legal process, is often forgotten today,” he said.
“I say nothing about the content of the allegation in this case, particularly in circumstances where neither the issue, nor the facts, nor all the correspondence, is before the court.
“It suffices to say that as a general matter an allegation of breach of professional obligations should never be made without very careful consideration.
“One reason for this is that in some circumstances the making such an allegation could itself amount to a breach of ethical obligations.
“More commonly, though, such allegations can be destructive of the relationships of respect that should exist in litigation, including the respect between opposing solicitors, all of whom are officers of the court.
“Other legal representatives in the course of practice, whether opposed or not, should always be treated with respect, dignity, and occasionally admiration.”
http://www.theaustralian.com.au/business/mining-energy/judge-slams-palmers-mineralogy-for-absurd-unr...
