The Supreme Court has refused to allow an inquiry into Todd-owned GXL Royalties' motives for blocking a petrol permit transfer.The permit, PEP 38742, was transferred from Swift Energy to Greymouth Petroleum in August 2008. Greymouth is now working th
The Supreme Court has refused to allow an inquiry into Todd-owned GXL Royalties’ motives for blocking a petrol permit transfer.
The permit, PEP 38742, was transferred from Swift Energy to Greymouth Petroleum in August 2008. Greymouth is now working the permit.
Todd family-owned GXL Royalties claimed that the sale breached a royalty agreement between GXL and Swift, which required GXL's consent before transfer.
In response, Greymouth and Swift had hoped to lay a counter claim that GXL had unacceptable and ulterior motives for refusing consent.
Both Todd and Greymouth had placed bids for the PEP 38742 permit when it was put up for sale.
But, in a judgment released today, the Supreme Court ruled that all that matters to the case is the question of Greymouth’s financial capacity.
In other words, if Greymouth and Swift are unable to prove that Greymouth had sufficient financial capability to meet its obligations under the sale, then it doesn’t matter if GXL had other reasons for refusing the sale.
“We cannot see how Swift and Greymouth could obtain relief against GXL on the basis that its actions were legally correct but it had a collateral motive,” the judgment read.
“We are of the view that an inquiry into alleged collateral reasons ... is irrelevant to the determination of this case.”
Greymouth and Swift were ordered to pay GXL Royalties $15,000 in costs plus disbursements.
