Tuesday 16th December 2014
|Text too small?|
Buller Coal, the would be Denniston Plateau coal miner owned by Bathurst Resources, has lost an application in the High Court to claim interest on a $4 million advance to Brightwater Engineers, the consultant for the escarpment mine.
In 2010, Buller sought resource consent for its planned escarpment coal mine on Denniston Plateau, which was finalised in May this year. At the same time as seeking the consents, it approached Brightwater in 2010 to provide engineering and contracting services for the mine, before employing them as a consultant in January 2011 and paying an advance of $4 million, with certain repayment and interest conditions.
In May this year Buller terminated its contract with Brightwater, recalling the $4 million advance, and sought to trigger the interest repayments on the loan, which was dismissed in a summary judgment by Associate Judge J G Matthews in the High Court in Nelson.
The contract "was structured in such a way that ultimately the advance or prepayment would be paid back by monthly instalments deducted from payments due to Brightwater for carrying out its work in relation to the Escarpment Mine project," Associate Judge Matthews wrote in his summary judgment. "Events conspired against Buller, resulting in it deciding not to proceed."
The miner had a protracted battle to win resource consent for the Denniston Plateau mine, with environmental groups opposing the application all the way to the Supreme Court. Earlier this year, Buller's parent, Bathurst, wrote off the $449.9 million value of its Buller coal project, which it plans to keep on hold until coking coal prices improve.
"Certainly it is not established, nor as far as I am aware suggested, that Brightwater has brought about or materially contributed to Buller’s position, and it is entitled to rely on the provision which sets out the basis upon which it would ultimately repay the prepayment," the judge said. "Buller cannot alter Brightwater’s obligations just because the viability of the project did not turn out as expected."
Associate Judge Matthews did not examine Brightwater's claim that Buller is estopped from demanding repayment or its alleged counterclaim and right to set-off and as the proceedings went to trial he did not make a decision on any issue, dismissing the application of summary judgment.
Buller will pay Brightwater costs as agreed by counsel.
Shares of Bathurst rose 5.3 percent to 2 cents, and have fallen 91 percent since the start of the year.
No comments yet
Broader review powers eyed for Climate Change Commission
MARKET CLOSE: NZ shares edge lower as global ructions weigh; Tourism Holdings sinks
NZ dollar rises as markets bet on US interest rate cut
Fonterra seeks further changes to dairy act
Tilt, Oji say transmission changes may discourage new generation
Tourism Holdings shares fall to 6-week low as US margins shrink
Venture capitalists split on govt picking winners
21st October 2019 Morning Report
Kiwi dollar steady as markets await Brexit developments
Domestic AGMs, multi-national earnings to provide economic insights