One court appeal dealt with, another legal stoush starts

AS ONE court proceeding was finalised this week, another was only just beginning for Wiggins Island Coal Export Terminal.

This week WICET and Civil Mining Construction had their appeals of a Supreme Court of Queensland decision dismissed.

The two companies have been involved in a seven-year battle over delays and disruptions to work CMC was doing for WICET in 2012.

At the heart of the court proceedings was CMC seeking $14.5million for a 208-day delay to the work, which it said was caused by disruptions by WICET.

Millions of dollars were exchanged between the two companies as a result of the proceedings.

WICET was ordered to pay $4.086million to CMC and CMC returned $2.94million to WICET as part of the coal exporter's counter-claim.

Several appeals have followed, including the most recent by both parties refuting the evidence used.

But this week the Court of Appeal upheld the original decision.

CMC said the overall composite daily rate, which totalled $38,000, should have been used to determine the value of the company's overhead costs for the 208-day delay.

But Justice Hugh Fraser agreed with the original decision that found in the case of a delay WICET would need to pay extra direct and on-site overhead costs but only those incurred because of the delay.

WICET argued CMC's evidence that showed it had another delay of about 40 days to earlier work at the terminal as part of the contract.

But Justice Fraser said the trial judge was correct to admit the evidence and dismissed both appeals.

Meanwhile New Hope Corporation started proceedings against WICET in the Supreme Court of New South Wales.

New Hope is one of the five miner owners of WICET.

The mining company shelved its Colton Coal Mine project, which was contracted to deliver 500,000 tonnes a year of coking coal to the Gladstone terminal.

Two of New Hope Corporation's wholly owned subsidiaries - Northern Energy Corporation Limited and Colton Coal Pty Ltd - went into administration in October.

The month before, the company told shareholders Colton had been canned and that the decision required a $132million impairment of exploration costs and asset values.

Now the company could be exposed to more financial damage after WICET filed court action regarding a shortfall in coal throughput at the terminal as a result of the mine's failure.

In the proceedings relating to the voluntary administration, WICET submitted that the debts of NEC and Colton are owned by New Hope, and should be repaid.

New Hope denied the claim but estimates if it is upheld by the Supreme Court, the company could be exposed to a potential liability of $130million.



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