Western Australia’s Parliament has passed unprecedented legislation aimed at blocking a damages claim said to be worth $30 billion, but its extraordinary legal stoush with mining magnate Clive Palmer is far from over.
The eye-watering claim — which amounts to the state’s annual budget — relates to a long-running dispute over an iron ore project in the Pilbara region of WA.
Mr Palmer, Mineralogy and International Minerals have an arbitration claim against the WA Government over decisions made in the early 2010s about the Balmoral South iron ore project.
Mr Palmer and his lawyers have argued proposals were unjustly refused, costing him billions.
Legislation to block the arbitration and any liability by the state of WA passed Parliament last night, just two days after it was introduced in the Lower House.
The legislation passed through the Upper House by a vote of 19 votes to nine.
This was despite the opposition and some crossbenchers calling for more time to consider the legislation, due to its unprecedented and complex nature.
Clive Palmer makes pre-emptive strikes
Prior to the bill passing, Mr Palmer made a couple of big moves of his own, aimed at thwarting the legislation.
Firstly, he had a significant win in the Queensland Supreme Court, which ruled that the arbitral awards previously made in favour of Mr Palmer be “enforced”.
Then Mr Palmer took further legal action, filing legal papers in the Federal Court demanding the state abandon its legislative intervention immediately.
That application also seeks damages, interests and costs against the state.
What does it mean for the huge damages claim?
WA Attorney General John Quigley previously said the Government couldn’t legally pursue the matter once it was registered before the courts, which is why the Government was so keen to see it rushed through Parliament.
For this reason, Mr Palmer was claiming to have had a significant victory following the order made by the Queensland Supreme Court.
But the WA Government had been anticipating such a move and designed this legislation so that once it was passed and became law, the arbitration was terminated as of Tuesday, when it was introduced to Parliament.
Premier Mark McGowan thanked Parliament for passing the legislation.
“The Government has done what it can to protect taxpayers from Clive Palmer’s $30 billion claim which would have bankrupted our state, and we’re very confident and all the legal advice says these laws will work,” he said.
He said it was unprecedented but had to be done.
“My conscience is clear. I know we have done the right thing here. We have done the right thing by the 2.6 million West Australians and future generations.”
What has Clive Palmer had to say in response?
Mr Palmer denied the WA Government had won and signalled a High Court challenge to the new law.
“The reality is the High Court will strike down their legislation,” he told Radio National.
“The Premier Mark McGowan and the Attorney-General are the first law officers that have ever given themselves indemnity from prosecution under legislation.”
The Queensland billionaire labelled claims by Mr McGowan he was seeking $30 billion in damages as “bullshit”.
Mr Palmer also said the WA Government could not overrule the Supreme Court of Queensland’s decision.
“[The legislation is] invalid. It won’t take the High Court long to throw it out, because that’s not what the separation of powers is all about.”
One way or another, the dispute appears bound for court
According to Murdoch University constitutional law lecturer Lorraine Finlay, the incredible legal battle is far from over.
“I don’t think anybody can say for certain exactly where this ends up, other than that the winners will be the lawyers and undoubtedly I think the losers are the people of Western Australia,” she said.
“Because no matter what happens here, I think there is going to be a protracted legal battle and there are just extraordinary circumstances that seem to leave Western Australia quite exposed to potentially an extremely large damages claim.
“We know that Clive Palmer will launch legal challenges in relation to this entire dispute and undoubtedly I think we are going to find that this will end up being decided by the courts.
“It is just a question of whether it is the [new] WA law that will end up being challenged in court, or whether it is the existing dispute that will proceed through the arbitration and then end up in court.”
So what precedent does the law set?
Intervening in a legal process in this way is an extraordinary step with potentially enormous consequences.
Mr Palmer claims the legislation is unconstitutional and will scare business off from investing in WA, by damaging its reputation as a trusted and reliable trading partner.
On the other hand, the WA Government has said this is a really unique set of circumstances, and therefore does not set a dangerous precedent.
But Ms Finlay said this legislation does present a risk.
“It is quite extraordinary because on the one hand we have got the WA Parliament trying to legislate itself out of litigation, and then on the other hand we have got Clive Palmer trying to litigate himself out of being affected by legislation,” she said.
“It does create some level of risk because the Government has shown that in some circumstances it is prepared to do this and to enact legislation that targets a particular person or a particular company.
“And undoubtedly that does establish some level of risk in terms of opening up the possibility that if there are extraordinary circumstances again, the government might take this action again.”