Hancock Prospecting Pty., controlled by Australia’s richest person Gina Rinehart, lost a bid to move a dispute involving Rinehart and three of her children from public courts to private mediation.
Hope Rinehart Welker, Bianca Rinehart and John Hancock sued their mother in Australian state court seeking to have her removed as trustee of the Hope Margaret Hancock Trust, which holds “no small part” of the family’s fortune, according to New South Wales Supreme Court Judge Paul Brereton. Ginia, the youngest of Gina’s four children, is standing by her mother.
Brereton, who had on Oct. 7 dismissed Gina Rinehart’s bid to suspend the lawsuit and order the dispute to be resolved in private mediation, today denied Hancock’s request for the same proposal.
Hancock claimed the suit would breach an agreement the family reached that among other things requires the company to be wholly owned and controlled by members of the family, since an outside person may be hired as a trustee, Brereton said in his ruling from the bench today.
It’s “not an inevitable outcome that non-family members will be the trustee” if the children are successful in their suit, Brereton said.
He also dismissed Hancock’s claim that the agreement over the trust prohibits disparagement of other family members.
“Bringing the proceedings against the trustee doesn’t necessarily bring disparagement,” Brereton said. Even if some disparagement occurred during the proceedings, that’s not enough to halt the lawsuit, he said.
Rinehart had won a ban on publication of arguments made in court and evidence filed in the case which, even though the New South Wales Court of Appeal overturned it on Dec. 19, remains in effect pending a hearing on Jan. 13. Judgments in the case can be reported.
The extension of the ban was “contrary to the requirement to treat open justice as a ‘primary objective,’” two of the appeal judges said in the ruling. “The proper conduct of trustees is a matter which warrants close public scrutiny.”
Rinehart became the first woman to top Forbes Asia’s list of Australia’s richest people this year as surging iron ore prices and exports more than quadrupled her fortune to $9 billion from a year earlier.
She inherited iron ore mining assets from her father Lang Hancock. Rinehart controls Hancock Prospecting Ltd. and on Aug. 25 she agreed to sell coal mines in Queensland to GVK Power & Infrastructure Ltd. for $2.2 billion.
The case is 2011/00285907 (case suppressed) New South Wales Supreme Court (Sydney).
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