Palmer took timeshare directors to court over fees
PRIME ministerial hopeful, mining magnate and resort owner Clive Palmer did not act in good faith when he took timeshare directors tied to the Palmer Coolum Resort to court to repay more than $400,000 in consultancy fees, the Court of Appeal has ruled.
The President's Club is a group of 325 members with a timeshare in villas at the Coolum Resort.
Mr Palmer took control of a company - Coeur De Lion Investments - in 2011 which had a 41% majority stake in the timeshare.
After looking over the books, Mr Palmer's company took the timeshare directors to court in an attempt to force them to repay $437,870 in consultancy fees.
The remuneration had been paid to the directors for work done on behalf of the Presidents Club at a rate of $200 per hour.
Mr Palmer had claimed there was no record that shareholders had approved paying out consultancy fees to directors and they had breached their duties.
But the Supreme Court found last year an agreement to pay consultancy fees to directors for work on behalf of the timeshare was documented in financial reports for all to see.
The Supreme Court also found that Coeur De Lion Investments did not give consideration to the benefits it received from the directors' work and was, in fact, aware the directors were being paid for the work.
The Supreme Court dismissed the application but Mr Palmer's Coeur De Lion Investments appealed the decision.
The mining magnate was dealt a loss on Friday when the Court of Appeal upheld the Supreme Court decision.
In delivering the Court of Appeal's decision, Justice John Muir stated that the fact Coeur De Lion Investments did not ask the directors to justify their consultancy payments before resorting to litigation was significant.
"Also relevant is the inference available from the correspondence referred to earlier that the appellant had no interest in resolving its claims by means other than litigation," he wrote.
The Court of Appeal upheld the Supreme Court's finding Mr Palmer's company had not acted in good faith.
The appeal was dismissed.