The pair made a fortune after scraping together every cent they had to put down a $1 million deposit to buy a neglected coal tenement at Middlemount, in central Queensland, for $30 million. In just over a year they were able to offload the mine to Macarthur Coal for $65 million in cash and shares worth up to $210 million.

But both men were set to earn millions more from Middlemount thanks to a royalty agreement that would give them $1 for every tonne of coal mined.

That money was to go to a company called Oceltip, which is 75 per cent owned by Mr Tinkler's wife, Rebecca, and 25 per cent by Mr Higgins's wife, Ruth.

But documents from the Brisbane Supreme Court show Mr Higgins - believed to have earned $53 million in cash from an initial investment of about $200,000 in Middlemount - is demanding access to Oceltip's records amid fears that some royalty payments are being diverted to one of Mr Tinkler's private companies.

It is understood Mr Tinkler has been trying to sell the royalty payment for a one-off sum that could be worth as much as $28 million.

Oceltip's quarterly royalty payments began in September 2009 at $3685 and grew to $519,355 in the June quarter of this year.

Neither man has spoken publicly about what severed their friendship but this legal battle provides the first insight into their now fractured relationship.

In correspondence submitted as part of the proceedings, Mr Tinkler's right-hand man, Troy Palmer, described the pair as having no respect for each other.

''It is no secret that Nathan and Matthew Higgins do not respect each other and have no desire to continue to deal with each other regarding the affairs of the company,'' Mr Palmer wrote to Mr Higgins's lawyer on November 14.

That response came after Mr Higgins's solicitor, David Schwarz, had claimed payments were being diverted from Oceltip.

''It is evident from a review of the documents, so far produced by you, that a substantial portion of the royalty payments made to date by Middlemount Coal and Ribfield have been diverted from Oceltip, at your instigation or at the instigation of persons on your behalf,'' Mr Schwarz wrote.

''We are instructed that our client requires that the amount diverted from Oceltip be repaid to it immediately … There are, it appears, significant tax liabilities that have not been satisfied.''

Middlemount Coal is holding any future royalty payments in its trust account until it receives a signed statement from both directors nominating an agreed Oceltip bank account.

Mr Tinkler's Sydney-based public relations spokesman declined to comment on Wednesday and Mr Higgins did not respond.

The matter is listed to be heard on Friday.