'A lot at stake' in Rinehart $5 billion trust case
The case will decide who will gain control of the lucrative family trust, if it can't be decided through mediation.PT1M45S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2v60g 620 349 October 8, 2013
West Australian billionaire Andrew "Twiggy" Forrest has publicly supported John Hancock in his battle to become trustee of a $5 billion family trust previously controlled by his mother, Gina Rinehart.
The NSW Supreme Court heard on Tuesday afternoon that the parties were still in negotiations over who would replace Mrs Rinehart as trustee, but that if no decision had been agreed by Wednesday morning pre-trial issues would need to be determined.
Battle over family trust: Gina Rinehart. Photo: Bloomberg
One of these was an affidavit sworn by Mr Forrest, the court heard, in support of Mr Hancock taking the helm as trustee. Mrs Rinehart's lawyers have objected to this.
Earlier on Tuesday, the battle between Mrs Rinehart and her two eldest children was delayed after the court heard a new trustee may be agreed upon.
In the NSW Supreme Court, Christopher Withers, the barrister for John Hancock and Bianca Rinehart, heard a proposed replacement trustee had been put forward overnight by Mrs Rinehart, her youngest daughter Ginia and Hancock Prospecting.
Allies: Gina Rinehart and daughter Ginia. Photo: Supplied
Mr Withers said the suggestion had some problems but also some “utility”, and asked the court for “some time to have those discussions”.
The court also heard that lawyers for Mrs Rinehart objected to the opening submissions made on behalf of the children, on the basis that they were “beyond the scope” of the pleaded case.
Mrs Rinehart's offer to relinquish her role as trustee last week means this week's hearing is now likely to focus on whether she deceived her children and was involved in altering tax advice from accounting firm PwC about the vesting of the trust.
The mining magnate could also face investigation by the replacement trustee over her decision to decrease the trust's holding in Hancock Prospecting to 23.4 per cent, and move the giant Hope Downs mine, which is being jointly developed with Rio Tinto, from the trust to the company.
Mrs Rinehart's two eldest children – John and Bianca – are fighting their mother over her role as trustee of the $5 billion family trust, which was set up by their grandfather, Lang Hancock. They argue their mother did not act in the best interests of the beneficiaries, and deliberately deceived them.
The dispute erupted two years ago, days before youngest daughter Ginia was to turn 25, triggering the vesting of the trust. Mrs Rinehart told her children they would be bankrupted due to a capital gains liability if they did not extend the trust and grant her further powers.
Last week, lawyers for Mrs Rinehart said she wanted to step down as trustee in an attempt to resolve the long-running dispute which her lawyers told the court had resulted in an “untenable risk” for her Hancock Prospecting.
She said she wanted a lineal descendent to be appointed as replacement, however the family failed to agree on a suitable candidate at a mediation last week and it now looks likely that decision will be made by the court.