LMCH V Bathurst Resources Supreme Court Decision

The following statement may be attributed to Richard Tacon, CEO, Bathurst Resources.

Bathurst Resources Ltd is delighted to advise that today the Supreme Court in New Zealand upheld Bathurst’s appeal against the case brought against Bathurst by L&M Coal Holdings Ltd (LMCH).

Today’s decision effectively sets aside the judgments ruled by the High Court and Court of Appeal.

The Supreme Court did find that a USD$40m performance payment had been triggered. However, the court also ruled that Bathurst can rely on the Royalty Deed, which forms part of the original agreement between Bathurst and LMCH. This means that for so long as the relevant royalty continues to be paid (even if that sum is zero), payment of the performance payment can be indefinitely deferred.

The Supreme Court also ruled that Bathurst’s Supreme Court legal costs must be reimbursed by the appellants, together with previous costs re-determined in the High Court and Court of Appeal.

Bathurst welcomes this decision, vindicating a nearly five-year defence put forward by Bathurst.

The case concerned whether a USD$40m performance payment was triggered under the sale-and-purchase agreement entered into between the parties for the purchase of Buller Coal Limited, by reason of the sale of around 54,000 tonnes of non-export quality coal to Holcim New Zealand for the then Cape Foulwind cement manufacturing plant near Westport.

It also concerned whether the company could rely on the terms of a Royalty Deed to enable the company to defer payment to LMCH.

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