MEC steps up legal fight after court dismisses case against BPH
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A West Australian court has dismissed MEC Resources’ application for summary judgment against BPH Energy to recoup a loan — but the energy investor still believes it has a solid case and is heading to trial.
The $5.7 million MEC (ASX:MMR) has an 8.3 per cent stake in $2 million BPH (ASX:BPH).
BPH holds investments in biotechnology and resources, including a 27 per cent interest in unlisted oil and gas explorer Advent Energy.
In September, MEC filed an application for summary judgment in the District Court of WA to recover $378,000 it alleged it was owed by BPH under a loan agreement.
A summary judgment application is brought when it’s believed the opposing party has no arguable defence to the claim and to avoid the formal trial process.
However, BPH said in announcement released to the market on Monday that the court ruled “it was arguable there had been no event of default”.
MEC noted in a separate announcement to the ASX that the basis for the decision was that “a potential delay in calling on funds owed from BPH Energy Ltd may arguably constitute a variation to the loan agreement”.
Despite the dismissal, the company now plans to proceed to trial.
“It is the company’s continuing belief that it has a strong case and will now proceed to trial through the District Court of Western Australia to recover funds it believes are outstanding and rightly owing to it,” MEC chairman Goh Hock told investors in an ASX announcement.
MEC believes the amount it is now owed has risen to $390,000.
BPH, meanwhile, disputes the claims and is counterclaiming for $388,050.
“BPH asserts that there has not been an event of default and that the loan is not due and owing,” executive director David Breeze said in BPH’s ASX announcement.