BIANCA HOPE RINEHART SEEKS JUDICIAL ADVICE ON A PROPOSED APPEAL AGAINST THE JUDGMENTS BY THE COURT IN PROCEEDINGS SHE HAS BROUGHT AS A TRUSTEE
Application of Rinehart: 2020/142504[2020] NSWSC 1624 (16 November 2020)
This is an application for judicial advice by the trustee of a trust known as the Hope Margaret Hancock Trust (“the Trust”). The trustee, Bianca Hope Rinehart, seeks advice on a proposed appeal against judgments by the Court in proceedings she has brought on behalf of the Trust.
Facts:
The proceedings in this Court are part of a long-running and large scale campaign of litigation between members of the Rinehart family. The family members are Georgina Hope (“Gina”) Rinehart, to whom I will refer as Mrs Rinehart, and her four children, John Langley Hancock (formerly Rinehart), Bianca Rinehart (the trustee), Hope Rinehart Welker and Ginia Hope Frances Rinehart.
Bianca Rinehart was appointed as trustee of the Trust by Brereton J in May 2015. The proceedings in this Court were commenced in March 2017 following advice given by Rein J. The judgments which Bianca wishes to challenge was given by Ward CJ in Eq in February and March this year.
The litigation is principally focussed on the affairs of Hancock Prospecting Pty Ltd (“HPPL”). HPPL is the holding company for the mining business established by Mrs Rinehart’s father, Langley George Hancock. Mrs Rinehart owns approximately 77 per cent of the shares in HPPL. The claims made in the proceedings in this Court which were the subject of the Chief Judge’s judgments concern complaints about the corporate governance of HPPL and the way in which its affairs are being managed.
The orders which are the subject of the proposed appeal arose from applications made to the Court by way of notice of motion. One of the reasons the Chief Judge gave for awarding indemnity costs against Bianca on the arbitration and stay motions was that she did not seek judicial advice before resisting those motions.
Issue: Should the court advise the plaintiff to appeal against the judgments?
Held:
Bianca is not merely seeking to place herself in the position of being able to appeal at her own risk; she is seeking the imprimatur of the Court for doing so. That would mean, in all likelihood, that if the appeal fails all the parties’ costs will come out of the Trust’s assets. The court is not satisfied there is sufficient benefit in a successful appeal to justify the delay and the expense if the appeal fails.
This conclusion means that there is no basis for challenging the costs orders made by the Chief Judge, so far as they concern the party-party costs of the arbitration and stay applications. Those costs must follow the event.
The court is therefore not in a position to determine in this application whether the Trust will actually be required to bear the indemnity component of the costs awarded by the Chief Judge, but there is at least a risk that it will. It follows that there may be a financial benefit to the Trust from an appeal. Pursuing an appeal on the costs issue would also not result in any relevant delay as it would not interfere with the conduct of the arbitration.
Furthermore, the court does not know how much the indemnity costs component of the costs order against Bianca is likely to be worth and the application before it was premised on an appeal on the substantive issues as well as the costs issue. The court does not know how lengthy and expensive an appeal limited to the costs point would be.
In the circumstances, the court thinks the best course is to adjourn the application so that Bianca’s legal advisers can consider whether to press on with an application for advice, limited to the indemnity costs component of the Chief Judge’s orders. If counsel consider that the benefit to be gained and the prospects of success are such as to warrant the cost of an appeal on that point then they can present the supplementary information needed in order to justify that evaluation.
Conclusion: The court orders that the proceedings be adjourned until 23 November 2020, or such other date as may be arranged with the court’s Associate, for the plaintiff to consider this judgment.
