Action by Clive Palmer's Mineralogy company against ASIC is "contrived and artificial" and seeking relief that would be "at best hypothetical and advisory", a judge has ruled.
Subscribe now for unlimited access.
or signup to continue reading
Mineralogy took the Australian Securities and Investments Commission to the Federal Court over financial statements it lodged in 2020.
But Justice Michael Wigney says there are at least some grounds for suspecting the proceeding "amounts to little more than an ill-disguised collateral attack" on criminal proceedings against Palmer.
The Mineralogy director faces charges of fraud and dishonestly using his position relating to millions of dollars allegedly paid from the company's bank account for marketing and advertising for Palmer's 2013 federal election campaign.
Mineralogy lodged financial statements for the year ending on June 30, 2014 in December 2020, some 10 months after Palmer was charged.
In the recent action Mineralogy asked the Federal Court to declare the particular audited accounts provided "a true and fair view of its financial position" for that financial year.
It claimed the action had "nothing to do with the criminal proceeding".
The company argued that ASIC - by pursuing criminal charges against Palmer - had "formed the opinion that Mineralogy's audited accounts contain false or misleading 'matter'," Justice Wigney said in his judgment published on Tuesday.
The company's board of directors was considering listing its shares on an international stock exchange and Mineralogy had "engaged in discussions with brokers, potential investors, lawyers and accountants concerning the execution of an initial public offering", Justice Wigney added.
"The evidence suggests, in that context, that some of Mineralogy's advisers have expressed concerns about what is perceived by them to be a conflict between the criminal charges against Mr Palmer and what was said in the financial report that Mineralogy had lodged with ASIC about the payments that form the basis of those charges."
ASIC responded to the Mineralogy action saying the court had no jurisdiction because there was no "justiciable controversy" between the parties.
Justice Wigney found there "is no genuine issue about whether Mineralogy's financial statements provide a true and fair view of its financial position for the relevant financial year".
"That is because it is common ground that the two impugned payments were effectively reversed or repaid by a payment that Mineralogy received from another company associated with Mr Palmer," he added.
"The controversy asserted by Mineralogy is contrived and artificial and the relief sought is, in effect, at best hypothetical and advisory in nature."
Justice Wigney also found the court had no jurisdiction to entertain the claim or grant the relief sought by Mineralogy.
But even if it did, "it would in any event have been appropriate to enter judgment against Mineralogy on the basis that it has no reasonable prospect of successfully prosecuting the proceeding", he added.
Mineralogy was ordered to pay ASIC's costs.
Palmer's criminal charges are listed for mention in Brisbane Magistrates Court on September 17.
Australian Associated Press
