Australian-listed miner Bathurst Resources is using a full-court press against L&M Coal
Holdings’ demand for a performance payment of US$40 million allegedly due
following its 2010 sale of Buller Coal Ltd.
It claims Bathurst is stalling on pre-trial disclosures. Bathurst failed to have L&M Coal’s
lawyers removed for conflict of interest, a move L&M Coal described as a
tactical ploy to force it to start all over again with new lawyers and a
consequent delay in getting to court.
The 2010 sale saw
Bathurst committed to payment in two tranches for its purchase of Buller Coal:
US$40 million paid upfront and a further US$40 million due when 25,000 tonnes
of coal had been shipped. Bathurst says
“shipped” means payment is triggered when 25,000 tonnes have been exported;
domestic sales in New Zealand do not count.
It further says the $US40 million does not have to be paid while
royalties are being paid. L&M Coal
says this is an open-ended option manufactured by Bathurst enabling it to game
its assets and make the lowest possible payment.
Ownership of L&M
Coal Holdings Ltd is opaque. At the time
of Buller Coal’s sale, ultimate ownership of L&M Coal was registered to an
address in Belize. L&M Coal complains
Bathurst is stalling. Justice Clark made
multiple orders against Bathurst: to set out the results of internal email
searches for relevant documents (this after Bathurst said it could find only
one relevant email for a dispute ongoing since 2009); to disclose
correspondence with its auditor (to assist in interpretation of when
performance payments might be triggered); and to disclose operational plans and
budgets for the Buller mine (in the face of an ongoing dispute over royalty
payments and the question of Bathurst’s intentions to continue mining, or not).
Bathurst argued Chapman
Tripp should be dismissed as solicitors acting for L&M Coal. The law firm did work for Bathurst when
buying Buller Coal. For three years from
2011, Chapman Tripp billed Bathurst $2.4 million for legal work, the High Court
was told. Justice Dobson said most of
this work was of an administrative, non-contentious nature. Bathurst provided no evidence that Chapman
Tripp had received any confidential information which might prove prejudicial
in its dispute with L&M Coal.
Chapman Tripp said it had put information barriers in place to ensure
its litigation staff could not access earlier Bathurst files.
L
& M Coal Holdings Ltd v. Bathurst Resources Ltd - High Court (25.09.17
& 26.09.17)
17.122