Archive for March, 2012

Qld debacle

March 26, 2012

Since Mr Howard left us (apart from casual encounters) I’ve largely forsworn political commentary on this blog, but the rout of the ALP in last weekend’s Queensland election is difficult to pass over in silence.

Long before the election, commentators have stated that the ALP was on the nose in Qld because of its failure prior to the last election (when it just squeaked in) to disclose its plans to sell off various government assets.  Voters did not forgive the ALP for this or for the abolition of a petrol rebate (though I’m not sure whether this was a plan which was not disclosed).

There is an irony here, given that the odds are that if the ALP decided to sell off state assets, it is hard to imagine (even allowing for the National Party as it once was) that the coalition/LNP would not also have sold off such state assets.  So why should voters switch their vote to the LNP on this issue?

Given the close call the ALP had in the last election, it seems to me the likelihood goes the other way: there must have been voters who switched their vote to the ALP or at least left their vote with the ALP precisely because they expected that way to prevent sale of government assets.

It is not necessary for voters to have actually been tricked for them to react against a political party: it is sufficient, especially given the fairly deep suspicion in the community against politicians, for them to be told that they have been tricked and to come to accept that belief, or to simply lose their faith in a political party.

That’s because democracy, at least when reduced to the casting of votes at elections, is such a blunt instrument.    In political discourse, this then makes arguments about “trust” very important.

The demise of the Democrats after their deal with the coalition over the GST is the obvious recent example in Australia of a loss of faith in a political party.  The loss of support for Rudd and the ALP in the first half of 2010 after the faltering on climate change seems to be another.  In the latter case, it hardly seemed to matter that the opposing party was offering nothing better: it’s as if the electorate or parts of it simply said “if you aren’t going to follow through on something which you used to rally our support to you, then we won’t support you any more – even though the other side aren’t going to do it either.”

Of course, there is no such thing as “the electorate” other than the aggregation of many individuals, and there are many other reasons for the changing political climate at that time which led to the wind spectacularly falling out of the sails of the global warming cause.

I’ve presumed to write about this now because on Saturday it was my pleasure as part of my “Continuing Professional Development” obligations to listen to a talk by former Justice Murray Wilcox about the Carbon Tax legislation.  I realised as I listened just how little I knew about it, and how little I had conceptualized how the tax is intended to work.  In a room full of lawyers, I was scarcely alone.  Somebody, in all seriousness, asked a question about whether some of the tax had to be paid to the United Nations.

Just now, the prospects of the federal ALP retaining office at the next election seem pretty slim.  I don’t think Ms Gillard can simply shrug off the “JuLIAR” rhetoric of the opposition.  She has to do a lot more to explain how the carbon tax works, to show that fears of its effect on ordinary punters as a “big new tax” are exaggerated.  It won’t be enough for her just to say “I didn’t lie; I changed my mind.”  She will need to persuade people that the tax is just a change of approach, and that it keeps faith with the fundamental goal of adopting a scheme to reduce CO2 emissions.

What is a bit outrageous to me is that she will also have to remind people that CO2 emissions need to be reduced.  It doesn’t seem like such a big leap from there to argue that the adoption of a scheme is a good and necessary thing, that even the coalition still says it is a good and necessary thing, and that the government’s measures have a better chance of doing what they aim to do than the opposition’s proposals.

Terracini, the man of the future

March 21, 2012

Last night with D to OA’s Così fan tutte.  Jim Sharman has done a rethink but along the way I think the production has lost its nerve. More on that anon if I can manage it.

As we left, the much touted Schwarwhaterver-it-is crystal chandelier could be seen in action above the floating stage on the other side of Farm Cove for what I presume was a technical rehearsal for the Traviata-on-the-‘arbour.

We’ve been treated to a barrage of publicity as the opening night approaches.  In the latest  SMH story : is the following gem:

At an early news conference, one elderly critic complained that part of the joy of going to an opera was seeing the orchestra at work. Terracini gave him short shrift, saying it was an outdated view.

So helpful for the spin that the critic was “elderly.”



March 18, 2012

On Saturday night with my old friend P to hear the first Australia Ensemble concert of the year.

The program was:

  • Wolfgang MOZART (1756-1791): Piano Concerto in F K413 with strings a quattro (1783)
  • Elena KATS-CHERNIN (b 1957): Interludes and Rags: 2MBS-FM Commission (2012) for flute, clarinet, oboe/cor anglais, piano, two violins, viola and cello
  • Claude DEBUSSY (1862-1918): Prélude à ‘L’après-midi d’un faune’ (1894) for flute, oboe, clarinet, antique cymbal, piano, harmonium and string quartet (arr attrib Hanns Eisler) – 150th anniversary of the composer’s birth
  • Pyotr Il’yich TCHAIKOVSKY (1840-1893): String Quartet No 1 in D Opus 11 (1871)

The Mozart is one of the early concertos which Mozart wrote with ostensibly elastic scoring (to borrow a phrase from Percy Grainger).  It can be performed with an orchestra with strings and winds,  with strings only, or even (as here) with 4 strings only.

It may have been difficult for Ian Munro to adjust his role to that of concerto soloist rather than ensemble pianist, and playing a concerto with only four strings is just a little odd.  There were many felicities but I thought the slow movement just a smidgin too fast – tellingly, it sounded nicer as it got a touch slower, before (after the cadenza) the strings started up at the old pace.  P commented that the whole approach was just a little uncompromising.

The Kats-Chernin has been written as a series of quasi-jingles for 2MBSFM. The instrumentation (cor anglais rather than oboe; clarinet in fact bass clarinet) gave a rather thick texture.  Lots was laid out in eight-bar chunks – then again, Schumann is a bit like that so that shouldn’t be any particular obstacle.  I liked the shortest movement the most.  A lot of the rest was also generally rather loud.  It was enthusiastically received.

The Debussy is one of those arrangements from the Vienna society for new music.  What this endeavour marks is the development of music to a point where two-piano or four-handed arrangements such as, say, Brahms produced for tryouts no longer sufficed to give a similitude of the real thing.  The harmonium replaces the missing orchestral masses to glue everything together.  I was totally captivated and wafted away to the warm pagan south – a cultural rather than an actual concept given that we live in a deeper and warmer south here even in a rainy summer.

The Tchaikovsky has one indisputably great and very famous movement, the second – which I enjoyed despite the elderly lady two seats to my left who spent most of it trying to unwrap her coughdrop rapper.  P has a love-hate relationship with Tchaikovsky and thought the last movement the weakest, as (she claims) is often the case with him.  I’m not sure which movements she had in mind for that.  Apart from the second movement, I thought the first movement the strongest.  It is marked Moderato e semplice.  The players realised the semplice aspect so placidly as to render the rhythmic figure quite cryptic (to me at least) for some time.

P and I always exchange musical gossip.  I learnt a bit more about the mysterious demise of the Wollongong Symphony Orchestra, and also that I had missed a concert which P’s husband claimed as being one of the four best he had heard in his life (apparently it was one of the best three until he stretched things to include the Berlin Phil) – a concert led by French oboist François Leleux in the SSO’s Mozart in the City series.

P was disappointed with OA’s Magic Flute but loved Figaro.  We wondered why it was taking so long to appoint another principal cello to the SSO.  We talked about how it can be that a player we like is not accepted by other players of the same instrument because they make “the wrong sound.”  Catherine McKinnon, the AE’s clarinetist, is such a player in both P’s and my experience of comments from other clarinetists.  P had heard a flautist with the LPO whom she liked more than other flautists and who she therefore wondered might fall into the same category so far as other flautists are concerned.

P also told me a good story.  She and her family spent Xmas and shortly after in Melbourne.  One day at Williamstown her son, T, was walking along the footpath, as boys of his age do, texting, when he literally bumped into the Prime Minister.  In retrospect he had registered that there was an area of the curb being kept clear and a number of people he now realises were bodyguards (quite casually dressed) were in the vicinity.  What must have happened is that the car pulled up and the PM stepped out and headed straight to the shop where she was about to have her nails done or whatever.  After they bumped into each other, and this is the bit I rather like, the PM extended her hand and presumably in a slightly humorous way introduced herself: “Julia”  to which T naturally responded ” [T].”

Earlier in the week, D and I drove north of Newcastle for Sq/x‘s funeral.  It was held in a church where S*s parents have worshiped for many years.  The present minister read a tribute written by them and S*’s sister.

S* himself ceased attending church at an early age.  When he reached the requisite age the minister at the time asked S* whether he intended to attend the church youth group, which was held on Friday nights.  S* replied that he couldn’t possibly come, as “that is the night I watch The Two Ronnies.”

The minister also recounted a story dating from S*’s last day of year 6, when awards were to be presented.  S* had been school captain and dux.   His mother asked if he would like corn beef in his sandwiches that day.  S* replied:

“Do not profane this day with talk of corned meats.”

The art of the sub-editor

March 15, 2012

News Limited is not happy about the proposals emanating from the Finkelstein Inquiry.

The Daily Telegraph today published an opinion piece by Paul Kildea.  He says “there has been little attention on the possible constitutional barriers to the inquiry’s proposals.”  He identifies four.

1.   Gaps in the commonwealth power: – “it will not apply to media entities that operate as sole traders or partnerships.  And a body that is currently a corporation could escape the reach of the power by changing its status.  Likewise, where online services did not operate as a corporation, “the scope of the Commonwealth’s broadcasting power to apply to internet regulation is uncertain.”

2. Giving powers to the proposed News Media Council which rightly belong to the courts.  Kildea concludes that this won’t really be a problem.

3.  Falling foul of the the constitution’s protection of political speech.  Kildea doesn’t doesn’t seem to think this will be a problem because “even if a court agreed that the council did limit speech, it may decide that it was for the legitimate purpose of improving journalistic standards.”  He comments (and I agree) that the proposed threshold of 15,000 hits a year seems low, but that is more of an aside.

4.  The federal parliament’s inability to put in place a truly comprehensive regime.  State co-operation will be required to plug the gaps in Commonwealth power in (1).  “Only then will media outlets and the public have the certainty that they require.”

All of which hardly seems to justify the headline:

Constitution could bite news watchdog.

I’ve yet to form a view as to the merits of the proposal as a whole, but as to Kildea’s points as numbered above:

(1)  I would have thought that with suitable drafting, the capacity of corporations to divest media assets to non-corporate entities could be effectively constrained.  If s 51(v) extends to broadcasting then it’s hard to see any problem with the internet. The gap seems limited to newspapers published by individuals.  Not a very big gap in the scheme of things or the gap which is of greatest concern for I hope reasonably obvious reasons.

(4)  What certainty do media outlets need?  They can always accept such a body’s ruling.  On Kildea’s argument, it seems the public’s uncertainty is likely to be whether print media published by natural persons will be covered, whether the posts and telegraphs power extends to the internet and whether a news website has more than whatever threshold of traffic might be settled on.


Deep pockets – the Rinehart-Hancock litigation – 2011 to 2019 (so far, including updates)

March 9, 2012

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   [2011] 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)   [2011] 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   [2011] 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)   [2011] 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   [2011] 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   [2011] 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)   [2011] 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   [2012] 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)   [2012] 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 [2012] 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)   [2012] 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) [2012] NSWSC 222

I’ll add the High Court transcript once it is up.

123.  Rinehart v Welker & Ors [2012] 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 [2012] 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 [2012] 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   [2012] 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)   [2012] 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.

Further update

18. Welker v Rinehart (No 10) [2012] 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) [2012] 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 [18] 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 [18], 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 [2013] 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.

Claytons capitulation

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 [2013] 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 [2013] NSWSC 1978

23.   10 October 2013 – Brereton J – Hancock v Rinehart [2013] NSWSC 1979

24.  11  October 2013 – Brereton J – Hancock v Rinehart [2013] NSWSC 1980

25.  14 October 2013 – Brereton J – Hancock v Rinehart [2013] NSWSC 1981

26.  3 December 2013 – Brereton J – Hancock v Rinehart [2013] NSWSC 1998

[26A   20 January 2014 – Hancock v Rinehart [2014] 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 [2014] NSWSC 156

28.   22 May 2014 – Brereton J   – Hancock v Rinehart [2014] NSWSC 637

29.    22 May 2014 – Brereton J  – Hancock v Rinehart [2014] NSWSC 658

30.  24 June 2014 – Brereton J – Hancock v Rinehart [2014] NSWSC 844

31.  26 June 2014 – Brereton J – Hancock v Rinehart [2014] NSWSC 860

32. 27 June 2014 – Brereton J – Hancock v Rinehart [2014] 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 [2014] NSWSC 932 – fresh front opened up by Bianca and John in application for preliminary discovery.

34.  28 May 2015 – Brereton J –    Hancock v Rinehart [2015] NSWSC 646 – judgment on the issues determined in the June 2014 trial.

35.  18 June 2015 – Brereton J – Hancock v Rinehart [2015] NSWSC 788 – clarification of order made on 28 May – dealt with in chambers.

36 – 24 June 2015 – White J – Hancock v Rinehart [2015] 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 [2015] 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 [2015] 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.

38A: 15 October 2015 – Brereton J – Hancock v Rinehart [2015] NSWSC 2140 – successful application (resisted by the defendants) for access to documents subpoenaed from Sceales & Co said to be relevant to a notice of motion in aid of enforcement of earlier orders to deliver up trust documents.  For some reason only published online in September 2017.

38B:  3 November 2015 – Brereton J – Hancock v Rinehart [2015] NSWSC 2148 – (published online Sep 2017) – defendant’s notice to produce set aside.  The plaintiffs had served a notice to produce on Gina relating to an email from July 2006.  Gina served a notice to produce about the circumstances in which the plaintiffs had got hold of it.  Brereton J betrayed some signs of wearying with the detail, especially as the actual email itself had already got into evidence some time earlier and no objection had been taken:

“Given the time that has passed since 2006 and the opportunities that have arisen earlier to protest that the email was disclosed inadvertently, it seems to me that to allow this issue, which is adjectival to another notice to produce, which is adjectival to a motion for production for inspection of documents, which in turn is adjectival to the plaintiffs’ motion for further orders to give effect to the orders of last May, would be allowing the issues to be unnecessarily expanded into yet another rabbit hole in the burrow.”

39. 5 November 2015 – Brereton J –  Hancock v Rinehart (Lump sum costs) [2015] 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) [2016] 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) [2016] 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.

[Update interpolated:

42:  22, 24 March 2016 – NSW Court of Appeal  Rinehart v Rinehart [2016] 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 documents 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.

[Update, 2018: the substantive application was finally determined on 5 November 2018 after written submissions closed in August 2017: Hancock v Rinehart (Trust documents) [2018] NSWSC 1684.  See [52] below.

And continued

 43 Hancock v Rinehart (Freehills subpoena) [2017] NSWSC 530

Still a notice of motion within the notice of motion about production of trust documents: Defendant’s notice of motion to set aside subpoena addressed to Freehills about 25 or 27 of 43 documents previously provided to plaintiffs by Freehills and then ordered to be returned dismissed.  Where the documents were both trust documents and Gina’s documents, Gina could not maintain privilege against Bianca as her successor as trustee.

Mid 2017 state of play

Rinehart atf The Hope Margaret Hancock Trust v Rinehart [2017] NSWSC 803 

In a directions hearing before Ward CJ in Eq, the current impasse is summarized.

In the proceedings commenced by Bianca as trustee, there were 4 notices of motion:

  1. an application by HPPL, by notice of motion filed on 21 April 2017, seeking referral of the proceedings to arbitration and/or a stay of the proceedings (HPPL’s referral/stay motion);
  2. Bianca’s application, by notice of motion filed on 27 April 2017, for leave to bring a derivative proceeding in the name of HPPL and to inspect its books (Bianca’s leave motion);
  3. Gina’s application, by notice of motion filed on 11 May 2017, also seeking referral of the proceedings to arbitration and/or a stay of the proceeding (Gina’s referral/stay motion); and
  4. Bianca’s application, by notice of motion filed on 12 May 2017, seeking to restrain Gina and the third and fourth defendants from, in effect, controlling or influencing HPPL’s conduct of this proceeding (Bianca’s conflict motion).

The main controversy was whether (4) should be heard first.

[April 2019 interpolated update:

In fact even this summary was not complete because on 19 June 2017 (unless this is the 11 May 2017 Notice of Motion) Gina had filed a notice of motion seeking a stay of proceedings and referral to arbitration.  The referral to arbitration was abandoned and the notice was otherwise summarily dismissed by Brereton J on 28 June 2017 in a judgment now published as [2017] NSWSC 1869. ]

But these were just the applications in the proceedings brought by Bianca, because in the background there was an arbitration (Bianca said it had been abandoned) and three other court procieedings, namely, adopting much of Justice Ward’s summary

A:   Federal Court proceeding commenced in October 2014

  1. In October 2014, Bianca and John brought claims in the Federal Court of Australia (NSD 1124 of 2014) against Gina, HPPL and various other parties (the Federal Court Proceeding). In that proceeding it is alleged that, in the mid 1990’s, Gina and HPPL engaged in a fraudulent transaction (a debt reconstruction) which had the effect of removing from the Hancock Family Memorial Foundation (the HFMF Trust) valuable mining assets that had been held for the benefit of Gina’s children and transferring those assets to HPPL. Bianca and John assert that those mining assets are now held by HPPL on constructive trust for the benefit of Gina’s four children (who are also the beneficiaries of the HMH Trust). They also allege that Gina used the debt reconstruction as a way to increase her shareholding in HPPL from 51% to 76% when there was an agreement between Gina and her late father (Lang Hancock) that the shareholding in HPPL would be held as to 51% by Gina and as to 49% cent by the children……Gina applied under s 8(1) of the Commercial Arbitration Act 2010 (NSW) for the claims made in the Federal Court Proceeding to be referred to arbitration, relying principally on cl 20 of the Hope Downs Deed. That application for referral to arbitration (together with a similar application by HPPL in the same proceeding) was heard by Gleeson J in 2015.After an eight day hearing, Gleeson J concluded (Rinehart v Rinehart (No 3) [2016] FCA 539 ) that there was a sustainable argument that some (though not all)of the claims in the Federal Court Proceeding fell within the scope of the arbitration agreement contained in cl 20.2 of the Hope Downs Deed (see [634]-[636]; cf [645]). Her Honour ordered that there be a separate trial of the question whether, among other agreements, cl 20.2 of the Hope Downs Deed was null and void, inoperative or incapable of being performed within the meaning of s 8(1) of the NSW Commercial Arbitration Act or the Commercial Arbitration Act 2012 (WA) (see Rinehart v Rinehart (No 3)As adverted to above, her Honour’s orders were the subject of applications for leave to appeal and cross-appeal that were heard by the Full Court of the Federal Court over five days in February this year (the Appeal Proceeding). The Full Court’s decision is currently reserved.

B:    Proceedings in the Supreme Court of Western Australia

Proceedings were commenced in the Supreme Court of Western Australia, before the Federal Court Proceeding was commenced, by Wright Prospecting Pty Ltd (Wright Prospecting) (CIV 3041 of 2010 consolidated with CIV 2617 of 2012) and by DFD Rhodes Pty Ltd (CIV 2737 of 2013), in relation to disputes as to the ownership of interests in the Hope Downs tenements operated by HPPL in the Pilbara region of Western Australia.John and Bianca have now also been joined in these proceedings.  In these proceedings they probably have common cause with Gina.

Gina has brought applications under s 8(1) of the WA Commercial Arbitration Act for the referral of the Western Australian Supreme Court proceedings to arbitration. Those applications have been stood over for hearing to a date to be fixed after the delivery of judgment of the Full Court of the Federal Court in respect of the appeal from Gleeson J’s decision in the Federal Court Proceeding (see Wright Prospecting Pty Ltd v Hancock Prospecting Pty Ltd [No 8] [2016] WASC 361).

C:     Federal Court proceedings commenced in 2015

The fourth proceeding to which reference was made is one that was commenced by HPPL against Bianca (as trustee of the HMH Trust) and others in the Federal Court of Australia (NSD 1625 of 2015), as to the issue whether HPPL is obliged to pay certain dividends under its constitution. That proceeding has since been transferred to this Court (see Hancock Prospecting Pty Ltd v 150 Investments Pty Ltd [2017] FCA 520).

Because the outcome in the appeal in A would affect (1) and (2) and also (probably) C, Ward CJ in Eq stood everything over to the end of August.  However, until  the Full Federal Court gave  a decision in A everything was  marking time.

Update, January 2018

In Hancock Prospecting Pty Ltd v Rinehart [2017] FCAFC 170 (27 October 2017) the full court of the Federal Court upheld an appeal against Gleeson J’s decision (No 3, at A in the summary of the state of play just above) and on 15 December 2017 in Hancock Prospecting Pty Ltd v Rinehart (No 2) [2017] FCAFC 208 orders for costs were made on the papers.  I haven’t the stamina to go into the reasoning now but the short outcome is a victory for Gina Rinehart, because the matters raised in the 2014 Federal Court proceedings brought by John and Bianca will now have to be heard by an arbitrator (and crucially, from Mrs Rinehart’s perspective, in private).

By now you will see my original quite orderly chronological and numbered sequence has been thrown into total disarray.  How does anyone keep track of all of this?

Update mid-2018

On 18 May 2018 the High Court granted special leave to John and Ginia to appeal against the Full Federal Court decision.  This was set down for hearing on 12 October 2018 but the hearing (as of October 2018has been vacated(Now rescheduled to 13 November 2018.) It may be because Wright Prospecting has applied to intervene as a non-party – as far as I can gather because judicial construction of a relevant deed may also affect a dispute between the Wright and Hancock sides in relation to the Hope Downs tenements.  (Wrights’ amended submissions are here.  There is a delicious and marked-up amendment in paragraph 3 from “different to” to “different from.”  How much did that cost?  No, priceless.)

Meanwhile, back in the Supreme Court of NSW

As we are roughly up to 50 I shall try (July 2018) to resume a numerical list starting at 51.

As trustee for The Hope Margaret Hancock Trust (the HMH Trust), pursuant to s 247A of the Corporations Act 2001 (Cth) Bianca is applying for access to the books of HPPL. That is part of (2) in Justice Ward’s list of applications above. This is an information-gathering prelude to her application for leave to bring proceedings on behalf of HPPL against Gina and others for breach of their duties to HPPL.  One claim is that Gina has been getting HPPL to make substantial donations which are for her own purposes and not for the purposes of HPPL.  Bianca already has obtained information (supposing that to be true) from the HPPL camp about donations which have been made, though not about their purposes.

Bianca applied to the court to issue subpoenas, duly issued, to recipients of such donations – a mysterious foundation called the CEF trust, which looks very much like a vehicle for making donations opaque, the IPA and (joker in the pack) Barnaby Joyce.  Joyce, you may recall, made unwelcome (to John, Bianca and Hope) interventions on Gina’s behalf at the outset of this dispute, and has shown signs of being very much in Gina’s pocket from time to time (even if he realised he had to return that $40K “prize”).

CEF applied to have the subpoena set aside.  HPPL took a more complicated path: obtained first access to the documents produced by IPA and without actually applying for the subpoena to be set aside, applied for access to be withheld from other parties (chiefly, Bianca).  Barnaby Joyce produced one document which the judge inspected and said didn’t even respond to the subpoena.

In the end her Honour set aside the subpoenas as too broad and speculative.  What in the trade is called “a fishing expedition.”  That is:

51      Rinehart v Rinehart [2018] NSWSC 1102

Thinking of Ward J’s decisions in the Dungowan Manly case, I can’t say that the winds seem favourable for any kind of derivative action – Ward J is not one to jump readily from dark suspicion (even if the plaintiff says it sticks out like dog’s balls) to  dark conclusions against those in control of a company.

However, the judgment does contain this little nugget of information about Gina and the IPA:

  1. Again, by way of background, IPA was founded in 1943 (see its 2017 Annual Report, Exhibit C p 52). It was described in the course of submissions on the present application as a “conservative think tank”. The objective of the Institute is said, in its 2017 annual report, to be to further the individual, social, political and economic freedom of the Australian people. Its 2017 annual report discloses that:

The Institute of Public Affairs relies entirely on the voluntary financial contributions that are freely donated by the members and supporters of the Institute.

86 per cent of the IPA’s revenue is donated by individuals, 12 per cent is received from foundations, 1 per cent from businesses, and 1 per cent from other sources such as interest. The IPA neither seeks nor receives any funding from government. In addition to the membership fees contributed by IPA members, the IPA received 2,913 separate donations during 2016-17.

At the end of 2017 the IPA had over 4,500 members, including more than 1,000 IPA Young Members. …

  1. The 2017 Annual Report also discloses that in November 2016 the Board of Directors of IPA bestowed Honorary Life Membership of IPA on three individuals, one of whom was Mrs Gina Rinehart, “in recognition of the commitment these three great Australians have made to the work of the Institute of Public Affairs over many years” (see Exhibit C p 62).
  2. In the schedule of HPPL donations and sponsorships provided to Bianca’s solicitors, it is disclosed that HPPL paid or provided amounts to IPA in a total of $2.3 million for the 2016 financial year and $2.2 million in the 2017 financial year. The annual reports of IPA for those years do not mention HPPL as a donor and the figures set out in the reports record that the vast majority of donations were received from individuals. Bianca submits that the inference to be drawn therefrom is that Gina herself has been credited by IPA for HPPL’s donations.

Just think of who is writing those cheques (or at least at whose direction they are written) the next time an IPA person pops up (as they so often do) on “our” ABC.

52.   (5 November 2018) Hancock v Rinehart (Trust documents) [2018] NSWSC 1684

This was a notice of motion filed on 3 September 2015.  Paragraphs 4 to 17 of Justice Brereton’s reasons for judgment are devoted to  its “labyrinthine procedural history.”  Suffice to say that considerable parts of that history are unsuccessful rearguard actions mounted by Gina and ehr camp, including 38A, 41, and 42 above, though some of the intervening delays involved documents belatedly produced or discovered in the hands of third parties.  Submissions finally closed in August 2017.

After mulling over it for a mere 15 months, Justice Brereton determined that Mrs Rinehart had not handed over all of the trust documents which she was ordered to hand over on 28 May 2015, and that she should be required to swear an affidavit verifying her production in terms of his decision as to what should and what need not be handed over, which she could at least potentially be cross examined on at a later date.

That would be a first for Gina or close to it: the beauty of being a very rich person is that you never actually have to do anything yourself.  Everything can be attended to by others who will do what you want and tell you as best they can what you want to hear whilst shielding you in many cases from direct scrutiny.  Even now, the scale of the task of identifying and producing trust documents to the new trustee is such (though I wonder maybe not so much as is claimed involves  the identification of documents as opposed to the vetting of documents to see whether they might be withheld) that if cross examined Gina could presumably palm the responsibility off on some minion, at least so as to avoid any direct censure.

As it was, Brereton J did not  find that Gina had deliberately withheld documents  or that there was an absence of good faith in her compliance with the orders (see [101]).  That’s the beauty of all that expensive advice and arguable though ultimately unsuccessful grounds for withholding them. Nor was he prepared to find that Gina had acted so unreasonably (once again, there were arguable points) so as to attract the sanction of an order for costs on an indemnity basis.

53 Rinehart v Hancock Prospecting Pty Ltd; Rinehart v Rinehart [2019] HCA 13 – 8 May 2019

The High Court dismissed the appeal against the Full Court of the Federal Court in January 2017 and allowed the Gina-camp cross appeal with the result that the claims brought in the 2014 Federal Court will have to be arbitrated, in private.- including (this is the outcome of the cross appeal) claims against companies which were not directly parties to the deed/s in question (the “third parties”). I have by now lost the stamina to delve into the details of this judgment so for the time being will leave that to others – if anyone is still interested. It’s sort of had to be interested in this sort of stuff if you aren’t being paid to be.

54      Rinehart v Rinehart [2019] NSWSC 759

(21 June 2019)

Described by Ward CJ as “but part of the ongoing litigious saga involving the first defendant (Gina Rinehart), one or more of her children and companies or entities associated with her.  A subpoena to the Commonwealth Bank and Notice to Produce to HPPL issued at the request of and by Ginia set aside at the application of the the Gina side (Gina and CEF) and HPPL.  The subpoena, as far as I can be bothered to make out, because it was not necessary and essentially speculative, and the notice to produce because it was not necessary and that also, given that the documents were sought in support of an application to obtain access to documents of HPPL, the notice to produce was potentially an abuse of process because it effectively sought the very documents to which the application was seeking access.

55 Hancock v Rinehart [2019] NSWSC 1451 Ward CJ in Eq 25 October 2019

It’s getting increasingly difficult to get a grip on this.

At [35] Ward CJ in Eq mentions a few other steps that I seem to have missed along the way, namely that:

The application for leave to appeal from the 2018 Orders was heard on 20 March 2019; and leave to appeal was refused on 27 March 2019. Applications for special leave to appeal, filed by Gina and HPPL respectively, have since been refused by the High Court ([2019] HCASL 242; [2019] HCASL 243).

(The 2018 Orders are those consequent on No 52 above.)

A subpoena and a notice to produce issued by the plaintiffs were set aside.    Ward CJ in Eq continues to look like a good draw for the Gina/HPPL camp, who on a few occasions seemed to be pleading to be taken back before Brereton J.  Justice Ward accused the plaintiffs of “jumping at shadows” [at 253].  Who litigating against Gina would not?

The tactical brilliance of Gina’s approach of digging in and then giving in (so that her resignation as trustee apparently carries no negative inferences about its reasons) continues to resonate though one might add it is not particularly brilliant – it is a very old trick of the deep-pocketed.  The time when Gina might actually have to swear an affidavit appears to be endlessly postponed.




March 5, 2012

Today I received a call from A, who went to law school with me. My friend, variously referred to in this blog as Sq, the specialist in operas set in Egypt involving nude bathing scenes, and Sx, the man with a morbid fear of being poisoned by a snail in a beer bottle and source of an anecdote of a circumstantially singular tort, had not turned up for work or called to say he wouldn’t be in. This was quite out of character.

I was (very) late in to work. I rode past Sq/Sx’s place on the way but couldn’t get in past the perimeter fence of the complex.

Later, A got in as far as the front door and there were further grounds for concern. The security door was not locked, and Sq/x’s mobile could be heard ringing if called. A phoned Sq/x’s parents, who live out of town. No-one in Sydney had a key. Eventually, with the parents’ approval, A returned and the police were called. A forced entry was made.

At about 9.30pm, A rang me. Somewhere in the country, police drove round to break the news. This is not or shouldn’t be about me, but it’s certainly not news I have come to terms with just yet.

It’s all in the fine print

March 5, 2012

At long last it seems that the press have twigged to the internet-reported cases as a cost-effective (and legally safe) source of reportage.

Last weekend the Sun-Herald published a report on a case which I had been preparing my own short post, only to get bogged down on the details.

It concerned a Ms Vu, 36, described in the article as “an unemployed single mother of two.” The article said that she was “ordered to pay back almost $1 million to NSW taxpayers after a court found her lavish lifestyle was funded by the proceeds of crime.”

As the article continued:

Thi Thanh Houng Vu, 36, said her parents and big wins on poker machines and playing blackjack at the Star casino and the Canterbury Leagues Club paid for her love of Louis Vuitton and regular trips to Vietnam, Thailand and Hong Kong. But her luck ran out when the police discovered her sole income between October 2003 and October 2009 was $160,896 from Centrelink.

The final paragraph of the Sun Herald‘s report said,

“Acting for the NSW Crime Commission, Ian Temby, QC, said Vu had in the period before October 28, 2009, engaged in ”serious crime-related activity”. Vu’s lawyer did not contest this.

That is not quite correct.

Under NSW’s Criminal Assets Recovery Act there are, broadly speaking, two types of orders which can be made.

The first is type is assets recovery orders. These orders forfeit specific assets to the crown.

The second type is proceeds assessments orders and unexplained wealth orders. These orders require a payment of a specified amount to the crown. All of the property of the person subject to the order is charged with payment of the amount.

The regime is draconian. For example, it has been held that there is no requirement to reduce the proceeds assessment order if there has already been an assets recovery order.

But the real sting in the act is that, notwithstanding the Sun Herald‘s report, it is not true that the money ordered to be paid is repaid, and it is not necessary to prove that the money is the proceeds of crime. Once it is established that a person has committed a crime of the requisite type, all of that person’s property whenever obtained can be made the subject of an assets recovery order and an amount equal to all of the money received by that person in the past six years can be ordered to be paid under a proceeds assessment or unexplained wealth order, unless or save to the extent that the person can prove that they came by the property or income by means of lawful activity. (There is some further protection offered to innocent third parties which I haven’t the patience to go into here.)

And the crimes of the requisite type are defined quite broadly. They include drug related crimes, and also fraud-related crimes which are punishable on indictment with a sentence of five years or more.

There is no need for any specific link between the crime which the person is found to be committed and the property they hold or income they obtained.

The serious crime used to trigger the Crime Commission’s powers over Ms Vu occurred when Ms Vu sought and obtained a mortgage of $184,000 in 2008 to purchase a flat in Bankstown from her sister. The total stated price was $230,000 and Ms Vu’s sister said that Ms Vu paid her the remaining $46,000.

In order to obtain the loan, Ms Vu’s income needed to be substantiated to the bank. This was done by means of a reference and some payslips from a Coogee Bay tobacconist which falsely said Ms Vu was employed there at a wage of $45,000. In fact Ms Vu had scarcely worked at all since she came to Australia in 1994, and had always been on the single parent’s benefit. The reference and the payslips were false.

Ms Vu’s lawyer did not contest that if Ms Vu was responsible for this, it was a fraud and would qualify as serious crime activity. The argument was whether Ms Vu had anything to do with it. There was a suggestion that it was all the mortgage broker’s work.

The judge was having none of this. “The very clear inference is that the Defendant well knew that these statements were being made on her behalf in support of the application, even if the evidence does not permit a clear finding to be made that it was the Defendant herself who created the false documents.”

At the time this was an offence under section 178BB of the Crimes Act and punishable by a sentence of up to 5 years’ imprisonment.

Ms Vu said that she had substantial winnings at the casino which, unlike her losses, did not show up on her loyalty card records. The judge did not believe her. A further attempt to argue that the order should be limited to the advance obtained under the mortgage received short shrift.

The amount of $922,000 ordered to be paid was determined by subtracting from all of Ms Vu’s expenditure over the relevant period (about $1.2 million, including the whole $230,000 paid for the flat) the amount which was obtained lawfully by her. The latter was about $300,000 on the Crime Commission’s analysis. The lawful income not include any amount advanced by the bank under the mortgage.