Lawyers for Gina Rinehart's children call on her to take stand in ...

15 Aug 2023

Lawyers for two of mining billionaire Gina Rinehart's children have asked the Supreme Court why their mother will not front court to answer key questions in a case over billions of dollars in Pilbara iron ore mines.

Gina Rinehart - Figure 1
Photo ABC News
Key points:Legal action is being taken by Bianca Rinehart and John HancockThey claim Lang Hancock placed assets in a family trust, partly for themTheir lawyers want Gina Rinehart to present for cross-examination

Bianca Rinehart, who was in court on Monday, and John Hancock claim their grandfather Lang Hancock, placed mining assets, including the Hope Downs tenements, in a family trust partly for their benefit.

But last week, lawyers for Gina Rinehart argued Mr Hancock had actually placed them in the trust behind his daughter's back, solely for his benefit and that of his then-wife Rose Porteous.

Bianca and John's lawyer Christopher Withers told the court documents show that was not the case, and accused Mrs Rinehart of "calculated and deliberate fraud".

"Gina knew exactly what Lang was doing. Ultimately, we submit that [Hancock Prospecting] cannot prove its allegations," Mr Withers told the court.

Bianca Rinehart leaves court during the lunch break.(ABC News: Briana Shepherd)

"For the same reason, the argument that Lang transferred assets into [Hancock Mining Limited] in order to avoid the scrutiny of Gina and in order to funnel money to Rose is particularly unpersuasive when one considers the fact that Lang kept her fully appraised of what he was doing."

'Where is Gina?'

Mr Withers challenged Mrs Rinehart to front the court in Perth.

"We ask this. Where is Gina? She is very much alive and able to give evidence as to these events," he said.

Gina Rinehart - Figure 2
Photo ABC News

"She won't come to court and allow herself to be cross examined about the critical events in this case .

Mrs Rinehart gave the keynote address at a mining conference in Perth on Monday.

Gina Rinehart fronted the News Corp 2023 Bush Summit in Perth on Monday.(ABC News: Cason Ho)

"Growing up on stations, the family unit is close, and trusting, as ours certainly was, which used to be well known in West Australia," she told the audience.

"(My father) made a huge and exceptional contribution to our north, our state and our country."

Marriage caused family tension

Across town, Mr Withers was detailing the breakdown in the relationship between Mrs Rinehart and her father after he married Rose Porteous in 1985.

He was delivering his opening address in John and Bianca's case over the Hope Downs tenements, in what is the fourth week of a massive civil trial involving multiple parties' claims to Hope Downs.

The court was told Mrs Rinehart had referred to Ms Porteous in "highly degrading ways", including as an "oriental concubine", and had attempted to have her deported.

Rose Porteous married mining magnate Lang Hancock in 1985.(ABC Archives)

Mrs Rinehart's lawyers had previously said she had been removed by her father as a director of family companies only because he did not want her to scrutinise what he was doing, as part of their allegations he was siphoning off millions of dollars under pressure from Ms Porteous.

Gina Rinehart - Figure 3
Photo ABC News

But Mr Withers said she was in fact stripped of her directorships because of her behaviour.

He said in September 1984, Mrs Rinehart had approached the Immigration Department in an "inexcusable" way.

A letter read in court showed Mr Hancock was furious with what he perceived as "disloyalty" from his daughter.

"Your action in telling the department that the company in which you've been given one third of the shares has paid wages to a person who was without a work visa is not only disloyal to your own family but brands you as a person who is unfit to hold office in [Hancock Prospecting]," Mr Hancock told his daughter.

"This is the last warning. Any further interference from you and I'll use the considerable powers that I have to see that you don't interfere any further."

He said Mrs Rinehart had also "stolen" her mother Hope's will when she died, then went overseas so probate could not be concluded, and also strongly objected to a deal to supply iron ore to Romania, warning it would be "ruinous".

Mr Hancock finally removed his daughter as a director of Hancock Prospecting in November 1985, saying her behaviour was "detrimental" to the company.

Mr Withers quoted Mr Hancock telling her he was "now completely fed up" and was going to let her "stew in your own stupidity".

Mr Withers said the situation was one where a director of Hancock Prospecting, Mrs Rinehart, was trying to have the chairman's wife deported and calling her all sorts of names.

Gina Rinehart - Figure 4
Photo ABC News

"It's obviously not acceptable behaviour for a company director," he said.

Previously, the court heard a week-long opening address from Wright Prospecting, which is claiming royalties in some Hope Downs tenements and an ownership share in others, known as East Angelas.

Wright Prospecting brought John and Bianca into the case to bind them to any court decision.

As her daughter Bianca attended the civil trial at the WA Supreme Court, Gina Rinehart was at a mining conference in Perth. (ABC News: Cason Ho)

There was also a week-long opening address by Mrs Rinehart's Hancock Prospecting, and several days of opening by DFD Rhodes, representing the heirs of another businessman and miner Don Rhodes, who also claims royalties from Hope Downs.

Hancock Prospecting last week argued in court Mr Hancock had breached his fiduciary duties by moving the Hope Downs and East Angelas tenements into a family trust to avoid scrutiny by Gina Rinehart and funnel money out under pressure from Ms Porteous to fund the luxury lifestyle she wanted.

Claims of 'calculated and deliberate fraud'

Mr Whithers, the lawyer for John and Bianca, said documents showed Mr Hancock in fact moved the assets into the family trust to benefit his grandchildren.

He also repeated a claim previous aired in a court that Mrs Rinehart had later acted to move the Hope Downs and East Angelas exploration licences into Hancock Prospecting "only as a result of calculated and deliberate fraud by Gina after Lang died".

Gina Rinehart - Figure 5
Photo ABC News

"We don't use the word fraud lightly," Mr Withers said.

"The events after Lang died constituted an egregious and dishonest fraud, orchestrated by Gina, and carried out by people who did whatever Gina wanted without question.

"Lang was simply not prepared to give Gina everything she wanted — which was everything," he said. "But Gina was not prepared to take no for an answer."

Bianca and John have previously brought legal action on this issue, accusing their mother of "stealing" from them by removing assets from the family trust.

These allegations were heard in confidential arbitration hearings in the Federal Court, with a decision on the case yet to be made.

Query met with 'barrage of lies, threats'

Mr Withers said this had left Mrs Rinehart with 76 per cent of all mining assets in Hancock Prospecting, rather than the 51 per cent as set out in a 1988 agreement.

He said when John Hancock confronted her about this, he was met with a "barrage of lies, threats and intimidation".

Mr Withers told the court this was done with the intent of preventing John Hancock from finding out Mrs Rinehart had "defrauded" him and his siblings of their inheritance.

He went further, arguing in court Mrs Rinehart engaged in a series of transactions to "devalue and destroy" the family trust, "increasing her personal wealth at the expense of her children".

"This fraud was subsequently covered up by Gina with a false narrative to her children and the public generally, that [Hancock Prospecting's] success and her own personal success was simply the product of hard work rather than dishonesty," he said.

Gina Rinehart - Figure 6
Photo ABC News

"The false narrative is that Lang dishonesty breached his duties and grossly mismanaged [Hancock Prospecting] and created a mess with the Romania project, which Gina had to clean up."

Wright Prospecting argues it is owed half of Hancock Prospecting's royalties from the Hope Downs 1, 2 and 3 tenements.(AAP Image: Christian Sprogoe)

Lang Hancock's 1980s deal to export iron ore to Romania was also used by Mr Withers to try to cut down the Wright Prospecting claim.

He recounted Mr Hancock had been told in the 1980s by then WA Premier Brian Bourke the only way he would be granted further exploration licences was if he developed tenements into mines and found new export markets, outside of Japan.

Wright case borne out of 'remorse'

The court heard Mr Hancock set about doing that, namely by developing a $600 million iron ore export deal with Romania, which was signed in Romania in April 1985 with Mr Bourke present.

Mr Withers said Wright Prospecting founder Peter Wright did not want to be part of this project because he was "risk averse" and their prospecting partnership continued to fade, as set out in several partnership agreements during the 1980s.

Mr Whithers said argued Peter Wright did not want to be part of Romanian deal because he was "risk averse".(ABC News)

He said Mr Wright was not interested in developing mines and the acquisition of Hope Downs tenements was not done for their partnership, as now claimed by Wright Prospecting.

He added that the current long-delayed case now brought by Wright Prospecting was borne out of "remorse" by Mr Wright's heirs, who wished he had been less risk averse and had joined Mr Hancock in the now-extremely valuable project.

Posted 22 hours agoMon 14 Aug 2023 at 5:31am, updated 16 hours agoMon 14 Aug 2023 at 12:01pm

Read more
Similar news