Following the three-day trial in May, Western Australian Supreme Court Justice Kenneth Martin said it was a “relatively straightforward legal conclusion that no binding or concluded contractual agreement was ever reached as between these parties as regards lithium rights or pegmatite rights concerning the Mt Holland tenements on 4 April 2016, or at all”.
Kidman and Marindi had agreed on terms for a potential deal in April via the exchange of emails and text messages between Kidman managing director Martin Donohue and Marindi MD Joe Treacy, but a drafted heads of agreements was never formalised.
Justice Kenneth Martin found that the deal between the two companies was nothing more than an agreement to agree.
He noted that after Kidman backed away from the deal, the relationship between the two MDs remained cordial, and the two enjoyed a “convivial” long lunch in Melbourne the following month.
“Such a cordial encounter on 13 May 2016 is inconsistent with Marindi evaluating itself as being 'dudded' by Kidman's withdrawal or repudiation from a 4 April 2016 binding agreement,” Martin said.
As a result, the legal claim sent to Kidman by Marindi’a lawyers in November 2016 was a “something of a ‘Pearl Harbour’ event”, Martin said.
“After April 2016 and before that legal demand Kidman had conducted a public rights issue in relation to the worth of its lithium rights at those tenements,” Martin said.
“That was in circumstances where Marindi had watched all that unfold in the market and yet publicly said nothing at all contrary as to Marindi holding conflicting contractual rights arising out of a binding and concluded agreement of 4 April 2016.”
Martin said Marindi’s case was seen to “flounder at its very first hurdle”, and therefore the claim was dismissed.
Marindi said it was disappointed and it was considering its position, while Kidman said it was glad to put the case behind it.
“We can now focus the attention of our entire leadership team on the fast-tracked development of Earl Grey, and other projects within our portfolio, for the benefit of all shareholders,” Donohue said.
Final orders are yet to be made and the parties have seven days to confer.
Kidman shares jumped by nearly 22% to A75.5c this morning, while shares in Marindi were down by 25% to 0.6c.