Ginia may fit bill for trust role
A day after Gina Rinehart offered to step down as trustee of the multibillion-dollar family trust, her youngest daughter, Ginia, has made a last-minute bid in the courts to shift the family fight out of the public gaze and into private arbitration.
An appeal by Ginia Rinehart was heard on Wednesday afternoon in the NSW Court of Appeal. A decision will be handed down on Thursday. The stakes are high as it is Ginia's first solo legal action without her mother. It follows a move by Gina Rinehart on Tuesday to stand down as trustee of the family trust in a bid to bring an end to the litigation with two of her four children.
As the appeal was heard, mediation was also taking place to see if the four children can come to an agreement on a new trustee. Going by a statement read by Rinehart's lawyer in court on Tuesday, Ginia fits the bill as her replacement of the Hope Margaret Hancock Trust.
According to Rinehart, the new trustee should be a lineal descendent who has no "characteristics which could put the trust assets at risk", and has an established record of "honouring agreements" and a string of other attributes, including "abiding by deeds and complying with any undertakings given to a court, with no history of wanting trust benefits applied disproportionately to their own benefit, nor a record of acting against the interests of the principal asset of the trust, willing to listen to advice from people experienced in the resources industry, then make informed and rational decisions about the interests concerning the beneficiaries' principal asset, the trust's shares in HPPL [Hancock Prospecting Pty Ltd]".
But what Rinehart wants and what she gets could be two entirely different matters. What is known is that Ginia will be hoping the appeal to have the case pulled into private arbitration goes her way.
The family feud began in September 2011 when Ginia turned 25, which was the trigger date for the family trust to vest. Instead of it vesting, three of the four children decided to take legal action against their mother to remove her as trustee, alleging "deceptive, manipulative and disgraceful conduct" regarding her management of the Hope Margaret Hancock Trust.
Ginia had originally said she would join the action but decided against it after the threat of looming bankruptcy. In an email to her sister Hope, she said: "I have to sign the deed if for no one else's sake than yours and my two nieces. You know at the bottom of your heart this lawyer stuff will never work ... I love you and I will always do whatever I can for you and your family. You guys are my world."
But the relationship soon soured when Hope continued the legal action against their mother. In an email on November 22, 2011, Hope asked Ginia for help, "I'm so desperate at this point ... I'm in a corner w a gun at my head, I can't afford rent, I can't afford the kids' education, I don't know what else to do or who else to ask".
Ginia responded: "How dare you spend your money on this litigation which is ruining my life and then not keep enough to pay your own daughters' school fees! And then ask ME to pay!"
Hope withdrew from the legal action this year due to financial problems and a broken marriage.
The fight has continued with the two elder children, John Hancock and Bianca Rinehart, wanting a trial, which has been set for October 8, where they want their mother cross-examined over her role as trustee.
In the lead-up to the trial next week, John and Bianca's lawyers are requesting more documents that relate to tax advice from PricewaterhouseCoopers in relation to the vesting of the family trust on September 6, 2011.
Orders were made on Tuesday for Rinehart to hand over all requested documents. These documents are expected to be used in the trial.
Some documents that were made available in court on Tuesday include notes from Rinehart requesting to "kill" certain words in a draft letter that was being prepared for her four children ahead of the trust vesting.
The notes, written on August 16, days before Rinehart's letter was sent to her children warning them they faced bankruptcy if the trust was allowed to vest as it would attract a significant capital gains tax bill, requests the date August be removed and "as late as possible send it to them just before JN [Jay Newby, her right-hand man] goes to bed September 4".
John Hancock later received a private binding ruling from the ATO that said no capital gains tax was payable by the beneficiaries.
Rinehart has argued she has always acted in her children's best interests as trustee. In a press release issued on Tuesday night, Rinehart's lawyers said: "It is unfortunate that some of the Australian media has been misled by one of the plaintiffs, and that there have been inaccurate, confused and outright misrepresentative articles published in some of the Australian press."
Unless a settlement is reached, it seems this and other matters will be left to the court to decide.