Today the High Court dismissed Gina Rinehart’s application for special leave to appeal from a decision of the NSW Court of Appeal dismissing an appeal from the decision of Justice Brereton to refuse to make non-publication orders concerning proceedings brought against her by three of her children.
I hope that’s not too many multiple negatives to follow.
It is now apparent that the trigger for the present proceedings now brought by those children (the youngest, Ginia, disowns the proceedings orginally brought in her name as fourth plaintiff and has sided with her mother and been added as second defendant) is an ultimatum delivered by Gina on the eve (more or less) of Ginia’s twenty-fifth birthday. On that date interests under the trust established by the late Lang Hancock were due to vest. The ultimatum was that, unless the children would agree to a fresh deed which would effectively give their mother long-term control of the trust, the trust would be allowed to vest by default. This was said to lead to substantial taxation liabilities which would in turn lead to the children’s bankruptcy.
You don’t need to know how this could be so or even what vesting is. The point is that it was within Gina Rinehart’s power as trustee to defer the vesting date to prevent these potentially catastrophic consequences.
Accordingly, the children (or at least some of them) approached the court urgently and ex parte (that is, without notifying Ms Rinehart) to get orders which would have the effect of extending the vesting date for a year – in other words, to hold off on execution of the ultimatum. Justice Brereton made an interim order which had the effect of extending the vesting date for a month. In fact (or so it was said when the matter came back to court the next day) even before that order was made, Mrs Rinehart extended the vesting date of the trust to 2058. [Subsequent reports say, and it is more likely: 2068. This is more explicable as it is the end of the 80-year period permitted under perpetuities legislation – another technicality I won’t go into here.]
Apparently Mrs Rinehart’s threat to do nothing and let the trust vest unless her wishes were acceded to is the misconduct which is relied on as justifying her removal as trustee of the trust. [There may be more, judging from subsequent reports and preemptive denials on Ms Rinehart’s of claims which have not yet seen the light of day in the press. The relevant conduct was said to have occurred in early September last year.]
The battle in the courts has so far been about two aspects of the proceedings.
First, Mrs Rinehart (backed by her youngest daughter) has sought to prevent publication of details of the claim and the dispute. Mrs Rinehart was successful in this on an interim basis when the matter first came back to the court on the grounds that it was arguably contrary to the terms of a deed between family members and other entities to submit any disputes to confidential arbitration. She has failed substantively all the way up the appellate hierarchy since then subject to further stays to preserve the utility of any appeal. That is what has come to an end effectively with today’s refusal of special leave by the High Court.
Secondly, Mrs Hancock and her youngest daughter say that the proceedings should be stayed because the requirement to submit claims under the deeds to arbitration means the proceedings makes the proceedings an abuse of process. Justice Brereton held that the claims were not claims under the deed, and that even if they were the deed was ineffective to oust the jurisdiction of the courts.
That decision is also being appealed by Mrs Rinehart but the appeal has not been heard yet. A subsequent application for a stay of the proceedings on substantially the same grounds by Hancock Prospecting Pty Limited, also a party to the relevant deeds, was dismissed.
The plaintiffs have opposed the oppression orders. One can readily suppose that they see publication of their claims as strategically to their advantage. After all, if their mother doesn’t want an argument in public, she could always accede to their demands.
In addition, it is burdensome to be shackled by suppression orders. They open up a risk of collateral skirmishes and accusations which make it difficult to prosecute a claim. If, as appears to have been suggested by their mother, they are in need of litigation funding their approaches to potential funders could be hampered by such orders.
The price of opposing the suppression orders is that they have had to endure some unwanted publicity themselves, even if that was unintended by their mother, once material relied on by her in the fresh risk-to-family-members application became public. See John Langley Hancock’s statement issued today which oddly refers to some of this material as having been “leaked” even though he opposed an application to suppress its publication.
It is astounding the amount of court time that has been taken up, chiefly by a combination of Mrs Rinehart’s determination to prevent the claim being brought or publicised and the determination of the media interests (including rivals, Fairfax and News, here commonly represented) to get at the story.
These are the internet-reported materials so far:
1. Welker & Ors v Rinehart  NSWSC 1094
Initial suppression order by Justice Brereton on 13 September 2011 after ex parte orders on 5 September and first contested return to court on 9 September 2011.
2. Welker & Ors v Rinehart & Anor (No 2)  NSWSC 1238
(Brereton J 7/10) Stay application dismissed with costs; interim suppression order to allow defendants to appeal.
3. Rinehart v Welker and Ors  NSWCA 345
(Tobias AJA 31/10) Suppression order continued in the Court of Appeal pending determination of appeal.
4. Welker & Ors v Rinehart & Anor (No 3)  NSWSC 1471
(Brereton J: 16/11) Defendants seek to defer filing defences until after determination of appeal. Defences ordered to be filed by 4 January 2012.
5. Rinehart v Welker  NSWCA 403
(Bathurst CJ McColl and Young JJA; 7/12, 19/12) – Review of decision of Tobias AJA and discharge of non-publication orders made by him – in effect an appeal against Tobias AJA’s decision to continue the suppression orders.
6. Rinehart v Welker  NSWCA 425
(Beazley JA, 21/12) – interim stay of orders of 19/12 pending hearing in January of question by fully constituted Court of Appeal.
7. Welker & Ors v Rinehart & Anor (No 4)  NSWSC 1636
(Brereton J; 22/12) – Application by “media interests” re stay dismissed; fresh substantive application by Hancock Prospecting for a substantive stay (effectively a duplication of the defendants’ existing and by then under appeal stay application) dismissed with costs to be assessed forthwith; some paragraphs of statement of claim struck out by consent.
8. Rinehart v Welker  NSWCA 1
(Bathurst CJ, Beazley JA, McColl JA) Suppression order continued up to 3/2/12 – to permit appeal on this to High Court.
9. Welker & Ors v Rinehart & Anor (No 5)  NSWSC 45
(Ball J; 1/2, decision handed down 2/2) Fresh application for suppression order made on grounds of risk to safety to family members. Application to suppress material relied upon in support of that application dismissed.
10. Rinehart v Welker & Ors  HCATrans 7 (1 February 2012)
(Crennan J, 1/2/12) Stay of orders of Court of Appeal (ie extension of suppression orders made) up to 9/3 when matter set down for special leave application. Matter heard between 4 and a bit after 7 pm). Orders made on 3/2 – see (1), (2).
11. Welker & Ors v Rinehart & Anor (No 6)  NSWSC 160
(Ball J; 28/2; 6/3) Fresh application for suppression order on safety risk grounds dismissed. A subsequent application to re-open the application was made and dismissed on 6/3. That is now:
12. Welker & Ors v Rinehart & Anor (No 7)  NSWSC 222
I’ll add the High Court transcript once it is up.
23. Rinehart v Welker & Ors  HCATrans 57 (9 March 2012)
(French CJ and Gummow J) Special leave to appeal decision of Court of Appeal (8 above) refused.
In the meantime, Mrs Rinehart’s lawyers have foreshadowed a fresh application to restrict publication of court documents on the basis of sensitivities of commercial in confidence information. This is an area where she has enjoyed some success in the past in the course of her long-running dispute with the Wright family.
Update, late April
It doesn’t seem as though the fresh application foreshadowed above was made.
In the meantime, to supplement the list above:
14. Rinehart v Welker  NSWCA 95
Court of Appeal (Bathurst CJ, McColl and Young JJA) 8/2, 20/4/2012: appeal against dismissal of stay application (2 in the above list) dismissed on ground that dispute not one under the deed. Appeal by HPPL against No 7 above dismissed for the same reasons.
15. Welker v Rinehart  NSWSC 588
(Brereton J, 9/5/12) Parts of a notice to produce issued by the plaintiffs set aside because some documents sought to be produced were not sufficiently referred to in the pleadings of the defendants to enliven the relevant rule (UCPR 21.10(1)(a)). It seems however, that the notice to produce in relation to the PwC advice (which I think is the tax advice which Mrs Rinehart said she had about the tax problem that her children would have if the trust vested) stands, so that will presumably now have to be produced.
Update – August – and there’s more!
16. Welker v Rinehart  NSWSC 839
(Brereton J, 9 May 2012, written submissions 11 May 2012, decision 25/7/12) – it turns out that Mrs Rinehart was given a further chance to make written submissions about the paragraph of the notice to produce dealing with the PwC advice, even though it was she who elected to file a notice of motion on 9 May returnable instanter. Most of these seem just to have been technical objections about the form of the notice (was it a notice to produce in the nature of a subpoena or a notice to produce for inspection? was the time reasonable? was the place for production specified?). None of these objections were upheld: the notice validly required production for inspection of the PwC advice being a document referred to in the defence, and it was ordered to be produced to the plaintiffs by 1 Sep – quite unclear to me why so much time was allowed.
17. Rinehart v Welker (No 3)  NSWCA 228
(Bathurst CJ; Beazley JA and McColl JA concurring. This one seems to have been slogged out on the papers with a decision on 30/7/12) The Court of Appeal awarded costs to the plaintiffs/respondents of the GR-side notices of motion which led to a temporary stay on 13/1/12 (see 8 above) and a subsequent stay granted by the High Court (10) pending the special leave application but were ultimately unsuccessful (13 and, substantively, 14). The Court declined to order that they be payable forthwith (normally such costs are not payable until the proceedings as a whole are completed, which obviously may not be for some time.) Gina Rinehart’s side was ordered to pay the media parties’ costs of those applications.
18. Welker v Rinehart (No 10)  NSWSC 1330
(Brereton J, 12/9/2012, decision 31/10/12) “two inter-related motions: the plaintiffs’ filed on 19 July 2012 in which they seek leave to amend the Statement of Claim; and the first defendant’s filed on 14 August 2012 in which she seeks summary dismissal of the proceedings.” The first defendant (Gina) was supported in the latter by the second defendant, her daughter, Ginia. The defendants maintained that now the trust was vested there was no real need to remove the trustee as the beneficiaries could call for their shares of trust assets to be transferred to themselves and the trustee’s discretions and powers were limited. Brereton J decided that it wasn’t quite as clear-cut as that and dismissed the application for summary judgment. He permitted the plaintiffs to make amendments relating to events claimed to have occurred since the original pleading, but did not permit an amendment that claimed that GR’s act in causing the trust was itself a breach of trust because of “the risk” of CGT liability to the beneficiaries. He said that the plaintiffs should either say that a CGT liability arose (my comment: obviously an unattractive proposition to them) or in the alternative that it did not, but could not claim compensation for the risk when whether such CGT liability arose (which in the light of a private ruling, seemed unlikely) was something which the court itself was in a position to determine. – Actually, I wonder a bit about that. For such a determination to be effective wouldn’t that require joinder of the Deputy Commissioner [of Taxation]? Over all, a win for the plaintiffs, if not a total one. Not a good week for GR, though her loss the day before, against the Wright family in the WA Court of Appeal, being a loss by Hancock Prospecting, was also a loss for her children.
Further late posting
19. Welker v Rinehart (No 11)  NSWSC 1341
(Brereton J, 12/9/2012 but only published in January 2013)
Leave sought by Ginia to file an application for compulsory mediation, returnable that day (when  in this list was to be heard), on the basis that documents produced by Gina the night before gave rise to a prospect of settlement. If such an order were made, its effect would be to postpone the hearing of , and even if argued, to delay it. Brereton refused it because the parties had prepared for the hearing, the prospects of a successful mediation did not seem particularly good (that’s putting it mildly – Ed) and it was an inappropriate use of court time and case management to consider the application that day.
He also set aside a notice to produce issued in relation to legal advice, the substance of which John Langley Hancock had revealed to Ellen Camp, as subsequently published in the Sydney Morning Herald. That was not because the advice was privileged, which his Honour commented it could no longer be once so publicised. Notices to produce and discovery prior to putting on each side’s evidence have recently been circumscribed in the Equity Division of the Supreme court under Supreme Court Practice Note – SC Eq 11 so the notice to produce was only sustainable if it was relevant to some interlocutory application. It was not so relevant.
I’m obviously not the only one tiring of this. Hope Welker has given up and gone over to her mother’s side. Francois Kunc, one of the counsel in the Gina camp, has taken an appointment. More tellingly, there has been a complete change in the remaining plaintiffs’ legal team. Andrew “Otto” Bell SC no longer appears for them and they have retained new solicitors and a team of relatively young counsel. I haven’t worked out whether this was forced by money, availability or even a threatened restraint by Hope (who of course is now backed by her mother though ostensibly a separate defendant in the proceedings as Ginia was in 19 above).
20. Hancock & Anor v Rinehart & Ors  NSWSC 1352
(Bergin CJ in Eq, 11/9/13; decision on 18/9/13)
Since April 2012 there had been a number of amendments to the plaintiffs’ claim. As a result of some of those amendments and on the application of HPPL (Hancock Prospecting Pty Limited) and HDIO, (Hope Downs Iron Ore Pty Ltd) orders were made on 30 July 2013 joining those companies as the fourth and fifth defendants. That’s pretty unusual for parties to actually want to become defendants, but then these are the companies presently controlled by Gina, so doubtless she sees some advantage in it.
On 19 August 2013 the plaintiffs filed their Third Further Amended Statement of Claim (3SC). On 26 August 2013 GHR, via her solicitors, gave notice to the plaintiffs pursuant to clause 20 of the Deed, in respect of three disputes allegedly arising under the Deed. “The Deed” is the deed which GR says binds the other parties (specifically John and Bianca) to going to confidential arbitration rather than raising the matter in the courts. On 27 August the defendants (other than Hope) sought orders orders staying all or part of the proceedings and referring all or part of the proceedings to mediation and arbitration. The application was urgent because the trial is set down to commence on 1 October 2013.
You can only begin to imagine how disruptive it would be to a plaintiff to face an application of this sort at this stage, just as it is making its final preparations for trial. Even if she lost, Gina would probably be a winner. And in the normal course of events, the extra costs would not be payable until the end of the proceedings even if she was ordered to pay them.
At the heart of the application was the claim that the amendments raised fresh matters which were disputes under the deed which were different from those on which Gina had previously failed to shut down the proceedings.
Justice Bergin did not agree: the matters raised by the amendment were either not under the deed or were not different from the matters on which the courts had already decided they were not matters under the deed. That’s a very brief paraphrase.
Later that day, apparently without opposition, the trial was put back a week to commence on 8 October. In the meantime there is to be a mediation.
Normal litigants are not accommodated by the court anywhere near so easily, let me tell you. If you lose a court date, you would normally have to wait months for another. Then again, given GR’s propensity to appeal anything, there is probably a public interest in avoiding any matter involving her being determined by the courts, regardless of the merits. Deep pockets have their own rewards, it seems.
On 1 October 2013 at what I presume to be a pretrial directions hearing, Mr McClintock, counsel for Mrs Rinehart, informed Justice Brereton that Mrs Rinehart wishes to relinquish her role as trustee. As reported in the SMH:
“Mrs Rinehart has come to the view that irrespective of her obvious abilities and experience, there is no further pressing need for her to continue as trustee,” he said. “Too much of Mrs Rinehart’s time to date has had to be diverted to this unnecessary litigation while she is in the process of building a major project for Australia and other demanding responsibilities.”
Justice Brereton formally noted Mrs Rinehart’s desire to discharge herself as trustee and to have a say in the identity of the new trustee.
The sting is in the last bit: Mrs Rinehart is not really giving up. She proposes to exercise her power to appoint a new trustee. It would make a mockery of the power of the court to remove an unfit trustee (as the plaintiffs allege she is) if, assuming the power of appointment of a replacement of a trustee is held by that trustee, the trustee could simply appoint someone else at the last minute. The ABC‘s report goes a bit further towards spelling this out.
So far as Mrs Rinehart is now prepared to step down as trustee, this is a classic deep-pocketed defendant tactic – you resist and make things as hard as you can for the plaintiff. Then, at the last minute you “give in”. The court commends you: how sensible you are to have saved the courts’ time. We won’t need to determine the merits of it all now that peace has broken out. Too bad about the plaintiffs’ costs: we’ll never know if their case was a winner or not because we are not going to have the trial now. They should be happy they’ve got what they wanted. Nothing here to see. Next case please!
Apparently Mrs Rinehart wants there to be a fresh mediation about the choice of a new trustee. That looks like another attempt to stave off the trial: after all, there’s already just been a mediation where Mrs Rinehart could have raised these matters and resolved them if they were amenable to mediation.
21. 2 October 2013 – NSW Court of Appeal More informed reporting of the developments on 1 October 2013 here. Ginia Rinehart is appealing to the NSW Court of Appeal, presumably against the decision of Bergin CJ in Eq at 20 above. Now reported as Rinehart v Hancock  NSWCA 326 (McFarlan and Meagher JJA). The application for leave to appeal by Ginia and the two companies (obviously these are controlled by Gina) against the decision of Bergin CJ in Eq at 20 above was fairly briskly rejected.
2016 update, with minimal elaboration:
22. 9 October 2013 – Brereton J – Hancock v Rinehart  NSWSC 1978
23. 10 October 2013 – Brereton J – Hancock v Rinehart  NSWSC 1979
24. 11 October 2013 – Brereton J – Hancock v Rinehart  NSWSC 1980
25. 14 October 2013 – Brereton J – Hancock v Rinehart  NSWSC 1981
26. 3 December 2013 – Brereton J – Hancock v Rinehart  NSWSC 1998
[26A 20 January 2014 – Hancock v Rinehart  NSWSC 5 – not strictly speaking part of the familial dispute – Brereton J declined to grant the ATO access to the court file. The Tax Office’s curiosity had presumably been whetted by the claims of taxation liabilities arising in certain circumstances.]
27. 21 February 2014 – Brereton J – Hancock v Rinehart  NSWSC 156
28. 22 May 2014 – Brereton J – Hancock v Rinehart  NSWSC 637
29. 22 May 2014 – Brereton J – Hancock v Rinehart  NSWSC 658
30. 24 June 2014 – Brereton J – Hancock v Rinehart  NSWSC 844
31. 26 June 2014 – Brereton J – Hancock v Rinehart  NSWSC 860
32. 27 June 2014 – Brereton J – Hancock v Rinehart  NSWSC 932th
The June judgments are procedural/evidentiary judgments arising from the trial on the issue of who should be appointed trustee in the light of Gina’s Claytons capitulation.
33. 10 March 2015 – Darke J – Hancock v Rinehart  NSWSC 932 – fresh front opened up by Bianca and John in application for preliminary discovery.
34. 28 May 2015 – Brereton J – Hancock v Rinehart  NSWSC 646 – judgment on the issues determined in the June 2014 trial.
35. 18 June 2015 – Brereton J – Hancock v Rinehart  NSWSC 788 – clarification of order made on 28 May – dealt with in chambers.
36 – 24 June 2015 – White J – Hancock v Rinehart  NSWSC 896 – Dismissal of notice of motion filed 23 December 2014 seeking to set aside first defendant’s notice to produce dated 5 December 2014. The notice to produce was served by the first defendant in connection with a notice of motion filed by the plaintiffs on 2 December 2014 in which the plaintiffs seek a gross sum costs order in respect of a costs order made by Brereton J against the first defendant on 9 October 2013. (This was an order made by consent that Gina pay the plaintiffs’ costs on an indemnity basis for their application to remove her as trustee. The plaintiffs were seeking a gross sum costs order for approximately $2.4 million.)
37. 28 August 2015 – White J – Rinehart & Anor v Rinehart & Anor  NSWSC 1201 – further application for preliminary discovery by Bianca and John – see my post on one specific aspect of this judgment here.
38. 31 August 2015 – Brereton J – Hancock v Rinehart  NSWSC 1311 – plaintiffs cut down the costs they were claiming in the lump sum application by about $500K and sought unsuccessfully to make a fresh application to set aside the notice to produce on the basis that some document were no longer relevant.
39. 5 November 2015 – Brereton J – Hancock v Rinehart (Lump sum costs)  NSWSC 1640 – lump sum costs decision on costs payable by Gina Rinehart. Decision lays out principles but does not precisely determine the amount.
40. 2 February 2016 – Brereton J – Hancock v Rinehart (Costs)  NSWSC 11 (based on submissions which closed on 30 July 2015 in relation to the balance of the proceedings determined in May 2015) Gina Rinehart ordered to pay two-thirds of the balance of the plaintiffs’ costs not covered by previous orders, on an ordinary basis without entitlement to be indemnified out of the trust. Possibly worn down by the resistance to the lump sum costs application the plaintiffs do not appear to have pursued one in this case. It is likely to be a protracted assessment.
41. 2 February 2016 – Brereton J – Hancock v Rinehart (Privilege)  NSWSC 12 – following the replacement of Gina as trustee by Bianca, Bianca claimed that Gina had not handed over all the trust documents to her as she was required to. On 3 September 2015 Bianca filed a notice of motion for further orders for Gina to produce documents. To obtain evidence for that she served a subpoena on Gina’s former (or at least historical) solicitors, who produced various documents to the court. Gina got first access to these and claimed privilege over them. That claim was rejected, on the rather amazing basis that there was no admissible evidence of the grounds of any claim for privilege, as well as some more technical (and rather typically Brereton-ishly sticklerism which will put a spoke in the wheels of how many claims are made for privilege over documents produced on subpoena) arguments about procedure. Orders stayed until 5 February in case Gina decided to appeal.
42: 22, 24 March 2016 – NSW Court of Appeal Rinehart v Rinehart  NSWCA 58
Leave to appeal against Justice Brereton’s decision (leave being required because it was an interlocutory decision) refused.]
and more to come!
It’s not clear whether the actual amount of the lump sum costs order has been determined, or the interest on those costs, or the costs of that costs application.
The substantive application for production of further documents by Gina as retiring trustee to Bianca as the new trustee is yet to be determined. It seems likely that at least some of the cocuments are sought by Bianca as ammunition or at least investigative material for further claims on behalf of the trust or the beneficiaries against Gina for her historic management (or mismanagement, as the case may be) of family/trust assets.